Preamble

The House met at Eleven o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

BUSINESS OF THE HOUSE (SUPPLY)

Ordered,

That on Wednesday next Business other than the Business of Supply may be taken before Ten o'clock and, notwithstanding the provisions of paragraph (7) of Standing Order No. 18 (Business of Supply), Mr. Speaker shall on that day, in the case of every outstanding Resolution reported from the Committee of Supply, put forthwith the Question, That this House doth agree with the Committee in the said Resolution.—[Mr. Bowden.]

BUSINESS OF THE HOUSE (WAYS AND MEANS)

Motion made, and Question proposed,

That on Wednesday next if a Resolution reported from the Committee of Ways and Means shall be agreed to by this House, and a Bill be ordered to be brought in thereupon, then, notwithstanding the practice of the House as to the interval between the stages of such a Bill, the Bill may he appointed to be read a second time immediately after the First Reading thereof.—[Mr. Bowden.]

11.6 a.m.

Mr. Richard Sharpies: I shall intervene only briefly. The Leader of the House should explain why this Motion is necessary. As far as I can discover-and I have asked the Table Office to look back as far as 1914-this is the first time that a Motion of this kind has been moved by the Government. Perhaps the right hon. Gentleman will correct me if I am wrong.
I realise that this may be a procedural Motion to enable certain other business to take place on that day, but, on the

other hand, that does not explain why there is to be no gap between the First Reading of what is a highly important Bill and its Second reading. I should be most grateful for an explanation.

The Lord President of the Council and Leader of the House of Commons (Mr. Herbert Bowden): The hon. Member for Sutton and Cheam (Mr. Sharpies) is quite right—I think that this is without precedent. It is an arrangement whereby the Consolidated Fund can be taken immediately after the sixth and final Supply day—the Supply day being taken formally—which, after the Consolidated Fund Bill, if the House approves, will enable a general debate to take place.
As with all business, this is a result of talks through the usual channels and I can assure the hon. Gentleman that there will be no forfeiture of time by the Opposition through this arrangement.

Sir Harry Legge-Bourke: I support my hon. Friend the Member for Sutton and Cheam (Mr. Sharpies). This is a dangerous precedent to set. It is within the knowledge of all hon. Members that, in this Parliament, we have had a number of subsequent Amendments after a Bill has been published with misprints in it. If we are to get to the stage where First Reading leads immediately to Second Reading it will be a very dangerous precedent.

Mr. Bowden: I appreciate that point, but the hon. Gentleman will be aware that the Consolidated Fund Bill is very often printed long before the final Supply day has been reached.

Question put and agreed to.

Resolved,

That on Wednesday next if a Resolution reported from the Committee of Ways and Means shall be agreed to by this House. and a Bill he ordered to be brought in thereupon, then, notwithstanding the practice of the House as to the interval between the stages of such a Bill, the Bill may be appointed to be read a second time immediately after the First Reading thereof.

MEETINGS OF STANDING COMMITTEE B

The following Motion stood upon the Order Paper:

That, notwithstanding the provisions of Standing Order No. 66 (Meetings of standing committees), Standing Committee B shall have power, during the consideration of the Prices and Incomes Bill, to sit on any day (whether or not the House shall be sitting on that day); that, in addition to any meetings already appointed, the Standing Committee shall meet on Thursday 4th August at Four of the clock in the afternoon, and that thereafter:—

(a) those provisions of Standing Order No. 66(1) which forbid the Committee to sit between the hours of One of the clock and half-past Three of the clock in the afternoon, and the whole of the provisions of Standing Order No. 66(2) shall not apply to the proceedings of the Committee, and
(b) no dilatory motion with respect to or in the course of Proceedings on the Bill shall be made except by a Member of the Government and the Question on any such motion shall be put forthwith.

11.10 a.m.

Mr. Speaker: Mr. Bowden.

The Lord President of the Council and Leader of the House of Commons (Mr. Herbert Bowden): Not moved, Sir.

Mr. Edward Heath: On a point of order, Mr. Speaker. As this procedural Motion is not being moved, would it not be in order for the Leader of the House to explain how the Motion came to he placed on the Order Paper at a very late hour last night, without any mention of it in the Business statement or Questions yesterday, nor as a result of any discussion through the usual channels, which he has just mentioned as the almost inevitable practice? What is

the Government's intention about this extraordinary Motion?

Mr. Bowden: It is not usual to mention the discussions which take place through the usual channels, as I reminded the right hon. Gentleman yesterday. I think that it is very unwise to do so.
Had this Motion been moved and approved, it would have enabled Standing Committee B to continue to sit at one o'clock on Friday of next week. Under the existing arrangement and a decision of the Standing Committee it can sit up till one o'clock. If it were the wish of the Standing Committee, and necessary, it could, under this Motion, have sat after one o'clock. I am, none the less, not moving it.

Mr. Peter Kirk: Is it not also a fact that paragraph (b)of the Motion removes one of the vital rights which the Opposition possess?

Mr. Speaker: Order. We cannot discuss the merits of a Motion which has not been moved.

Mr. Heath: Further to that point of order. The right hon. Gentleman said that he was not moving the Motion. Do I understand that this is the final decision—that there will be no moving of this Motion?

Mr. Bowden: I think that we had better wait and discuss this, as we discuss all business, through the usual channels.

Mr. John Boyd-Carpenter: Does that mean that the Motion is to remain on the Order Paper, or to be withdrawn?

Mr. Bowden: It is to be withdrawn.

SEA FISHERIES

11.11 a.m.

The Under-Secretary of State for Scotland (Dr. J. Dickson Mabon): I beg to move,
That the White Fish and Herring Subsidies (United Kingdom) Scheme 1966, a copy of which was laid before this House on 12th July, be approved.
I think that it might be for the convenience of the House if, at the same time, we discuss the White Fish and Herring Subsidies (Aggregate Amount of Grants) Order, 1966, since the sole purpose of this Order is to increase the total sum of money available for subsidies from £43 million to £46·25 million so as to cover expenditure under the Scheme referred to above.

Mr. Speaker: Provided that the Opposition have no objection to that course, I agree.

Dr. Mahon: I feel that it is quite a privilege for me to take part in a debate on fisheries. During the 10 years or so that I have been in the House I have never spoken on fisheries, but in the preliminary work which I have done to arm myself against the undoubted interventions of hon. Gentlemen opposite, I have been surprised at the richness of nomenclature which bespatters—and I think that that is the correct word to use in the context—the arguments and descriptions of the different parts of the operation of subsidies that go on in this important industry. In Scotland, we are almost equal with our English friends, may be even more so, in terms of activity in fishing, and, therefore, I hope that English and Welsh Members will not feel averse to a Scottish Minister opening a debate of this kind.
As hon. Members will have noted, we have only one subsidy scheme this year instead of the usual two. There are so many provisions common to both white fish and herring subsidies that it seemed sensible to combine the schemes. The subsidy rates are not the same for both; they will operate from 1st August for white fish, and 1st September for herring, when the current schemes expire. But the same terminal date, 31st July, 1967, applies to both. I feel sure that (his change is a simplification which

avoids a good deal of repetition, and will commend itself to the House.
On the economic position of the industry, I am glad to report that the general results of the British fishing fleet in 1965 have shown a further improvement over previous years. Taking white fish and herring together, the volume of landings increased by 67,000 tons to 884,000 tons in total and their value increased by nearly £3·75 million to a record figure of £58 million. I am happy to report to the House that in the first five months of 1966 landings have again increased by a further 40,000 tons compared with the same period last year and by £1–6 million in value.
It is against this background that we have settled the rates of subsidy for the coming subsidy year. The deep sea trawler fleet as a whole has come very near to repeating in 1965 the operating results of 1964 which were, of course, a great improvement on earlier years. An increase in profits of the distant water section was however offset by some decline in those of the near and middle water sections. The House will recall that the basic subsidy rates for these sections of the fleet must be reduced annually by between 7½ and 12½ per cent. their levels in 1962. This year we are applying the second of three annual cuts of 10 per cent. that my right hon Friend the Minister of Agriculture Fisheries and Food announced last year, and, as all hon. Members know, this has been accepted by the trawler owners.
The Sea Fish Industry Act of 1962 authorises, in addition, the payment of supplementary subsidies for classes of trawler in special difficulty and applications were made for such special payments for all classes at Aberdeen and one class at Milford Haven. These classes suffered some decline in profits last year and my right hon. Friends examined these cases with great care.
They came to the conclusion, however, that the factors mainly responsible for this decline—chiefly higher costs—were of general application to all sections of the fleet and could not be regarded as special difficulties of the kind which would justify additional subsidies under the Act and felt obliged therefore to turn down these claims.
I know that this has caused dissatisfaction to the owners concerned and that


the Scottish Trawlers Federation, in particular, is concerned at the way in which the policy enshrined in the Act is working out in practice. The Government have accepted that policy for the time being, but, as hon. Members will know, have undertaken to review it in the light of developments. This review is in progress. My right hon. Friend the Secretary of State for Scotland will be meeting the Scottish Trawlers Federation next week to discuss the position and hear its views.
The main improvement in profitability in 1965 has been in inshore and herring fleets. This is particularly gratifying in Scotland where these vessels account for well over half the white fish and almost all the herring catch. For these vessels the subsidy is not automatically reduced; it is reviewed annually in the light of the results of the fishing. The aim has been, however, to reduce the dependence of these sections of the industry on the Exchequer as quickly as circumstances permit.
Last year we felt the improvement in earnings justified a reduction in subsidy rates, and we are satisfied that a further reduction can well be borne out of the increased profits which have been earned. The new rates proposed in the scheme represent reductions of broadly the same amount as last year, and are comparable with the reductions applied to the deep sea fleet.
There are, however, some changes in the method of payment of white fish subsidy to which I should refer. Hitherto, vessels over 60 ft. registered length have been paid voyage payments at so much per day at sea. This has also applied to seine net vessels of under 60 ft. making voyages of eight days or more. Apart from these seiners, vessels under 60 ft. in length have received stonage payments at so much per stone of fish landed.
The two methods were intended to have comparable value, not similar value, taking account of the different sizes of boats involved. But during the last year or two it has become apparent that the abnormally prolific fishing off the coast of Scotland has enabled many of these vessels on stonage rates to earn large amounts of subsidy far exceeding those payable to larger vessels over 60 ft.
It was, of course, always realised that there could be anomalies between the two systems, but what has happened is that the anomaly has been virtually all one way. This has meant that very large subsidy payments have been made to such vessels, and at a time when their very heavy catches made these vessels less in need of them; it has seemed unfair to the larger vessels on daily rates whose subsidy is independent of the catch and some of them have had difficulty in competing for crews with the smaller and more heavily subsidised vessels.
We were strongly urged by the fishermens' associations last year to find a common basis for paying subsidy, and my hon. Friend the Minister of State promised to try to secure this. As a result, the Government have found it not only practicable, but indeed right, that we should do so for the greater part of the inshore fleet.
The Scheme therefore provides for the extension of daily rates to all vessels between 35 and 60 ft. in length, with one class of exception. The exception is that if a vessel registered before 1st January, 1965, earned less than £500 in subsidy in 1965 it will continue to receive stonage rates, as will also vessels under 35 ft. Most of the boats covered by the exception are engaged only part time in fishing, and we have felt is impracticable to put them on daily rates.
Our aim has been, therefore, to put on to daily rates all vessels which have shown by their results that they are consistently and heavily engaged in fishing for white fish and herring, and we think that this gets as near as possible to uniform treatment for the inshore fleet as a whole, and substantially meets the objective urged on us last year. We have fixed the daily rates for the vessels under 60 ft. at levels which are in ratio with those for larger inshore vessels, which, of course, are fully engaged throughout the year in this kind of fishing.
We are aware that if we compare the current subsidy earnings of some of the boats involved in this change with what they will be able to claim under the proposed arrangements there will be a very big drop indeed. That is quite true; but the reason is that in the last year some of these boats have been receiving


very large subsidies which are quite disproportionate to the subsidies paid to the larger boats on daily rates—in many cases two or three times as much subsidy as the average for the larger boats.
I asked for an illustration of this for the benefit of the House and I was told that three Scottish vessels of less than 60 ft. were paid over £5,000 in subsidy in the calendar year 1965 compared with the average of about £1,700 for the larger boats in the same calendar year. This has been a main cause of friction among inshore fishermen and we believe it right to remove it.
The other change I should mention—which is less controversial—is in the treatment of a vessel on daily rates landing mixed catches including shellfish. At present, if the shellfish is worth more than the rest of the catch no daily rate of white fish or herring subsidy can be paid. We now propose that in these circumstances stonage payments should be made on the white fish or herring within the limit of the appropriate daily rate. We believe that this will be fairer to the fishermen.
As my right hon. Friend the Minister said last year reductions in subsidy are never as welcome as improvements in profits and I know that some of our inshore fishermen have been critical of the proposals we are putting forward. But it is the very marked and widespread improvement in those profits which we believe makes it desirable in accordance with the general policy, which I understood was agreed on both sides, to reduce the subsidy rates. We do not believe that the changes will impair the ability of our fishermen to make a welcome and worthwhile contribution to the National economy in all parts of the country, and I commend the Orders to the House.

11.22 a.m.

Mr. Patrick Wall: I start by saying how much we regret the fact that the Minister of State—the hon. Member for Edinburgh, East (Mr. Willis)—who usually makes a contribution to our debates, is not with us this morning. I understand that he is on Government business north of the Border. This gives us an opportunity to welcome the hon. Member for Greenock (Dr. J. Dickson Mabon). We are privileged to see him joining in our fishery debates.
We are glad that his interests are turning from medicine to fisheries.
There is a connection between medicine and fisheries, as I discovered to my cost. When I first became Member of Parliament for Haltemprice my wife and I were asked to visit a cod liver oil factory run by the fishing industry. We had an excellent lunch, but to my horror I discovered by my plate a bottle of cod liver oil and I was expected to follow my host's example and to pour this cod liver oil over my soup.
The Under-Secretary, with his usual Scottish lucidity has introduced these measures, but he has not given us the usual rather wider-ranging account of developments in the industry in the past year. I imagine that that will come later on, when the other Under-Secretary winds up. In spite of all his Scottish lucidity, however, it will require a considerable amount of Irish blarney to persuade the House to accept these measures, which impose savage and unprecedented cuts on the smaller inshore fishing vessels, particularly those fishing from Scottish ports.
I want at the start to make a few broad remarks about the industry. It is never possible to be certain about its future, for reasons some of which are well outside the control of the Government but some of which flow directly from the lack of Government decision, followed by a wrong decision at too late a stage—their decision on building grants and minimum prices, to which I shall refer later.
This uncertainty extends to all parts of the industry—not only to the long-distance vessels but to the inshore section, the W.F.A. and the distributive side. The Minister's speech has not contributed one way or the other towards removing this uncertainty, because he did not refer to it. I therefore hope that we shall have a statement about these matters from the Government Front Bench later.
I would remind the House that this industry is unique in that it depends on hunting rather than rearing or breeding. It operates in cycles, depending on the run of the fish and these natural cycles are often complicated by international politics. I should like to give an example. The year 1960 was a poor fishing year,


emphasised by the fact that Norway and Iceland extended their limits. The year 1961 was a bad fishing year, as was 1962. The year 1963 was also a poor fishing year and in that year negotiations for Britain's joining the E.E.C. broke down, much to the sorrow of the fishing industry, which has much to gain from Britain's entry into the Common Market. In 1964 we had a good fishing year, and another good year in 1965. But uncertainty in these two years has been increased because of the Government's indecision on building grants and over the introduction of a statutory minimum price scheme.
These cycles are completely unpredictable, but the industry must be able to retain some of its fat to protect itself in the lean years. I suggest that the Government will make a mistake which may have far-reaching consequences on the industry if they cut away too much of this fat in extreme reductions of subsidies or the imposition of excessive taxation.
I now turn to the Measures themselves. As the Minister has said, they show a reduction of 10 per cent. in the operating subsidies for the coming year for the near, middle and distant water vessels. The industry accepted this 10 per cent. reduction, which is designed to phase out these subsidies by 1972. They were designed to re-equip the fleet with modern vessels, and we agree that this task should be possible to complete by 1972.
I now turn to that part of the measures which affect the inshore vessels, namely, vessels under 80 ft. in length. Here we have a rather different story. The first point that must be made is that there has never been any suggestion of phasing out subsidies to inshore vessels by 1972, or any suggestion, as far as I know, of a specific cut in any year. Therefore, I can only repeat that the cuts proposed for certain classes of vessel—especially those fishing from Scottish ports—are savage.
It is extremely difficult—and this difficulty faces hon. Members on both sides of the House every year—to compare this year's Scheme with last year's, and last year's with the previous year's because they tend to vary in relation to the size of vessel. Sometimes the subsidy operates in the case of vessels between 50 ft. and 60 ft. in length, and sometimes in the case of vessels between

55 ft. and 65 ft. in length. Again, there are further complications this year because of the alteration from stonage payments to day voyage payments.
We hear from the inshore fishing industry that, broadly speaking, these cuts reduce the subsidy paid to the inshore fishing industry in Scotland from about £1¼ million to £840,000. To put it another way—and this information was given to the House in a Parliamentary Answer only yesterday, so it is authentic —these orders impose a cut of £407,000 in respect of Scottish vessels in the coming year and a cut of £90,000 on inshore vessels operating from British ports. This is a serious state of affairs.
I want briefly to assess some of these cuts. First, I want to deal with the inshore white fish vessels. If we look at Part I of Schedule 1 accompanying the White Fish and Herring Subsidies Scheme we see that there is no direct comparison between this year and last year for the first three rates, but consultations with the industry have shown us that the cuts in respect of vessels between 40 ft. and 60 ft. amount to 48.5 per cent. That is extremely serious, particularly coming as it does after the cut of 34 per cent. in the preceding year. We are told that the cut proposed by this Scheme represents a reduction of 10s. per man per day while the ship is operating. The last two rates represent —according to the Ministry Memorandum—a cut of 13s. for vessels between 55 ft. and 65 ft. and £1 for vessels between 65 ft. and 80 ft. This is an estimated cut of 12 per cent. and 21 per cent. respectively, which represents a reduction of 2s. and 2s. 3d. per man per day at sea.
I now turn to herring vessels, the largest class, those between 40 and 80 ft. in length, which are referred to in Part 3 of the Schedule. The Minister's memorandum tells us that the cuts are 17s., 13s. and 24s. in the three different size ranges. This represents on an average a cut of 10 per cent. or the equivalent of a reduction of £286 per vessel in the year. It could be and has been argued that the past year has been a good one and that therefore an average overall cut of 10 per cent, which is in line with the cut for the trawling industry could be expected. I would agree, if this were the maximum cut for inshore vessels, but of course it is not.
The cuts this year under these measures represent a minimum of 10 per cent. up to 48–5 per cent, for certain vessels. I accept that there is the extraordinary case of the vessels, to which the Under-Secretary referred, which have been earning quite large subsidies on stonage rates. In their case, the cut is as large as 70 per cent., which is of course enormous but has some justification. But there is little justification for a cut for the large class of vessels of 48·5 per cent. I am sure that many of my hon. Friends who represent constituencies north of the Border will want to take up this point.
I should like to congratulate the Minister in combining the two Measures in one and securing the same ending date —31st July next year. I should, however, like to suggest a further change. Hon. Members on this side representing Scottish constituencies may wish to throw out the measure because of the cuts, but if they succeed in doing so, no subsidies would be paid for white fish vessels after 31st July this year and none for herring vessels after 31st August this year, which would be disastrous for the industry.
My suggestion is this. Would it not be better, both for the House and for the industry, if the measures remained in force until superseded by a new one? I should like the hon. Gentleman to consider that matter.
As is customary in our annual debate on these Statutory Instruments, I will now deal with some of the problems which are worrying the industry, particularly the question of building grants and loans, which has caused grave uncertainty in the industry this year and has undoubtedly held up the re-equipping of the fishing fleet which hon. Members on both sides desire. The House will recall that the scheme for grants—

Mr. Speaker: Order. We cannot discuss building grants on this. The hon. Member must link what he is saying to the subsidy.

Mr. Wall: With respect, Mr. Speaker, as the fishing industry is debated only once a year on these Statutory Instruments, as I understand it, you and your predecessors have always ruled that during this debate, as it is the only one in the year, we could bring up subjects which are outside their scope, but which

could technically be combined with them, because they are related to the White Fish Authority's Report which is published each year and which we normally discuss in this, our annual debate.

Mr. Speaker: I will be as generous as I can with the hon. Gentleman. He must, however, ingeniously link what he has to say to the subsidies.

Mr. Wall: I was going to explain to the House how certain of the larger vessels in the industry have been in receipt of grants designed for re-equipping the fleet so that it could operate properly and so save Government money, which is expended on them through these Instruments. This Scheme was first introduced in 1961, and the Government of the day made a final appropriation of just over £500,000 in July, 1964. Then came the General Election and in November the new Government announced that the whole system was to be reviewed—the Minister mentioned this and that this review should be completed towards the end of this year.
About this time, the grant fund ran out and it was not until eight months later, in July, 1965, that the new Government provided £1·6 million for rebuilding the industry. Of this, £860,000 was provided for distant water vessels, which catch 83 per cent. of the fish landed and £740,000 for the type of vessels which are mainly dealt with in the Order —the inshore vessels, which catch 17 per cent. of the fish landed. This grant had to provide for vessels built between November, 1964, when the fund ran out and April, 1967—a period of two years, five months.
This matter was taken up in an Adjournment debate, when the Joint Parliamentary Secretary to the Ministry of Agriculture accused me of mixing up a three-year period with a one-year period. This is reported in col. 207 of HANSARD of 6th December, 1965. He said that the allocation of £670,000 for 1966 was a good one and dismissed the fact that only £190,000 had been allocated for 1965.
I do not want to refight old battles, but the sums so far allotted by the present Government and their immediate predecessors are only £160,000 above the annual average previously allocated and they have had to last for nearly two and a half years. This is the matter which


has caused so much uncertainty in the industry. It means that the White Fish Authority has had to freeze applications for building grants for over 18 months, and this has made the re-equipment of the industry far more difficult.
In January this year, the Government published a White Paper on investment incentives. Their explanation of the effect of the White Paper on the fishing industry was made in March. It said that grants would in future be 35 per cent. for 80 ft. vessels and over and 40 per cent. for those under 80 ft. These grants will be made only when Parliament approves and I am wondering when Parliament will be asked to approve. When will we be asked to amend legislation—I understand that it has to be amended for this purpose—and what strings will be tied to these grants?
Will the industry have to continue to scrap one old ship in order to get a grant for building one new one? I would also add that although an increase of 10 per cent. in the grant is acceptable, we should not forget that it replaces an investment allowance of 40 per cent. Since 1962, grants have been linked with scrapping and it is the view of the British Trawler Federation, representing most of the larger vessels in the country, that this should no longer be the case.
I hope that the hon. Gentleman will deal with this point, because it is causing considerable anxiety to those in the industry. They feel that British vessels are as efficient as foreign ones, yet the share of the British market which goes to British-caught fish is falling. Those in industry believe that one of the reasons for this is that strings are attached to the grants, namely the scrapping provision. They hope that this will be ended with the introduction of the new system of grants.
Many in the industry believe that a straight grant of 20 per cent. of the cost with no ties, as for the shipping industry, would be much more acceptable to the trawler owners than the Minister's proposals. The Government must recognise that these are matters of great concern in furthering the object which both sides of the House have in mind—the re-equipment of the industry by

1972. If the hon. Gentleman changes his mind time and again and announces a new system of grants without giving the conditions for those grants, he causes concern in the industry. I hope that he will today clear up this concern and this uncertainty.
I turn to another subject of great interest to anyone connected with fishing, whether concerned with the distributive side or with the larger vessels or the inshore vessels. The industry is experiencing a period of change from conventional to freezer trawlers, from frozen fillets to fish stick blocks. A new vessel costs £500,000 and can stay at sea for 50 days. It is not easy to get good crews for such long periods, and pay must be adequate to the hard life. This year a basic guaranteed wage for a 56-hour week has been agreed and overtime has been accepted in principle. But already new claims are being put in for a 48-hour week instead of a 56-hour week, plus special Sunday pay.
The industry is faced with many imponderables, including contracting grounds due to expansion of limits. Iceland still claims the waters up to the continental shelf and may try to implement the claim any time. The minimum price scheme affects all the vessels concerned in the Order. This is basic to the rates of subsidy because on it depends the price received for the fish that these vessels catch. There has been a voluntary scheme, which operates today. It started for the distant water vessels in Hull in the twenties and spread to Grimsby in the thirties. It is contended that minimum prices help the small producers they are getting fairly large subsidies, though they are much reduced this year as they set a floor and affect overall prices. This is now being challenged in the Restrictive Practices Court. The Government have not helped by uncertainties over building grants and, above all, by failing to make up their minds about the statutory minimum price scheme. It is a sad story which will have severe repercussions on the industry.
To recount developments, in July, 1964, the Government of the day authorised discussions with the industry about a statutory scheme. Discussions took place that autumn on the basis of a Treasury contribution, which the industry maintained was a sine qua non of its


participation. In October came the General Election. The whole of 1965 was spent in trying to persuade the Minister of the desirability of having a statutory scheme with Treasury support. I hear the Minister interjecting. I should perhaps say that a year was spent in the Ministry trying to persuade the Treasury to produce the financial support to make a statutory scheme possible. It was not until March this year that the Minister, in answer to a Question, said that the Government had approved a scheme in principle but there would be no Treasury contribution.
This necessitated a complete new round of negotiations with the industry. In the meantime, the Restrictive Practices Court was investigating the voluntary price scheme. It should be noted that the industry has to persuade the court that the scheme is in the public interest and that it therefore has to take positive action, and that is no easy task.
I have a number of questions to ask the Joint Parliamentary Secretary. As the Government have delayed so long, what will their position be if the Court rules that a minimum price scheme is against the public interest? Are the talks between the White Fish Authority and the industry proceeding satisfactorily? Does the industry agree to a statutory scheme shorn of Government support? I hope that the Minister will answer these questions. He is looking in the opposite direction, but I hope that he is paying attention. These are matters of great importance to the industry.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Hoy): The hon. Gentleman knows that that case is be-tore the Restrictive Practices Court so the matter is sub judice and it is not for the House to discuss it at the moment.

Mr. Wall: Obviously, the hon. Gentleman has not been listening to me. I was asking him whether the talks between the White Fish Authority and the industry on the scheme are continuing and with what result. I also asked whether the industry agrees to a scheme with no Government financial participation.
In the circumstances which the hon. Gentleman has outlined, will the White Fish Authority have sufficient authority to control a scheme which directs the

industry but does not contain provision for Government financial participation? It seems rather like having a managing director who has no shares in his own company. I understand that the Treasury contribution needed is only £500,000 to £1 million and that this would produce a workable scheme covering the small ports and ensuring a good quality of fish and a better system of sales promotion. I hope that we shall get a reply to those points, although the Minister does not look as if he wants to reply.
The whole future of the White Fish Authority may depend on the Government's decision. If it is to administer a statutory scheme and be assured of Government moral and financial support and be able to contribute towards the distribution side of the industry, it will be in a position to act positively and co-ordinate the whole industry in a positive way. In the event of the Government not agreeing, its future may have to be considered. I put it to the hon. Gentleman what a different position the fishing industry would be in today if the Government had approved a statutory scheme early in 1965. It would not have been called before the Restrictive Practices Court, and an effective quality control scheme would be in existence, as would a sizeable advertising scheme, and no one would have had doubts about the future of the industry.
In case the hon. Gentleman does not believe me, I commend to his attention the last paragraph of the White Fish Authority's Report this year:
We would merely comment that, if more positive leadership is required, then the Authority's powers seem to us too wide in their generality and too inadequate in detail to be fully effective in application. We believe that the proper exploitation of the sea's resources and the future provision of an adequate supply of British-caught fish will require from Government a more positive attitude towards the country's fishing industry and perhaps some fresh thought about the powers necessary to a strong public body which can help formulate and carry out longterm policy.
I hope that the Minister is giving the thought that the Authority has asked for.
If the Authority does not get the powers that it wants and does not get the Treasury contribution that it has asked for, we must ask ourselves some questions. Should the Authority and the Herring Industry Board amalgamate and


control only the inshore industry, or should it disappear altogether, leaving the Minister to administer building grants, operational subsidies and research and development. I say this in no way to disparage the work of the Authority.
Mr. Roy Matthews and his team deserve the thanks and support of both sides of the House. Mr. Matthews has had too little support from the Government. The Government must think ahead. If they want a White Fish Authority, then they must pay for it. If they do not want it, then they should let the distant water firms, which are capable of running their own side of the industry, off the leash. After all, they have to compete with other sections of the industry as well as with foreign imports.
I turn to a few matters referred to in the Authority's Report. First, there is research and development. We should commend Mr. Matthews and his team for the wonderful work that they have done for a very small sum—£374,000. It has been very good value for money. Some excellent results have been obtained. The research and development side of the Authority is now earning an international reputation. It has concentrated on vessel design, improvements in gear and saving of labour. We should also pay tribute to the Industrial Development Unit in Hull, which has now been in existence for four years, and the Fisheries Laboratory and the Torry Research Station.
Fish farming is referred to in the Authority's Report and its special Report on Research and Development Progress. This is extremely important for the future. Not only must man learn to live on and cultivate the bed of the ocean, but we should bear in mind that any study of the ocean is extremely important for this country, which is, after all, out of the space race. Through our fisheries and the Royal Navy, we can do much in the exploration of the bed of the ocean. The Report perhaps speaks a little dismally about the development of fish farming, but a great deal has been done. It is shown that fish can be farmed. One of the troubles is that most of the fish put in an enclosure at Ardtoe, Argyllshire, were attacked and eaten by crabs. I under-

stand that the remaining fish have now grown and that the survivors are winning the battle and themselves eating the crabs. I commend this Report to the House. It is of great importance for the future.
From crabs to lobsters. The Minister will know—I have given him notice that I would raise this matter—that the North-Eastern and Northumberland Fisheries Committees are extremely worried about his decision to lift the prohibition on landing berried lobsters. They say that practical experience has shown that the prohibition was very beneficial for improving lobster stocks. I hardly dare say this with so many Scottish hon. Members present, but the Committees suggest that enforcement has not been carried out in Scotland and that Scottish vessels have come to fish for lobsters off the North-East Coast and are taking a good harvest.
I understand that the scientists still disagree on this matter. The Ministry's investigation started in 1958, we had an interim report in 1961 and since then there has been nothing. We must assume, therefore, that the Minister's decision to lift the prohibition was based on theory rather than fact. How long will we have to wait for the final report?
Experience in both the Sea Fisheries Committees has shown that the existence of the prohibition increased the lobster stocks. Indeed, in one pot off the North-East Coast for which records were kept, there was an increase of from 7 per cent. to 18 per cent. in the catch of berried lobsters between 1958 and 1965. These practical fishermen believe that the Minister's decision was wrong, although I thank the right hon. Gentleman for having increased the minimum size of lobster that may be removed from the sea. because this has to some extent redressed the balance.
I had intended to say a considerable amount about conservation, but I must not detain the House for too long. I will merely comment on the extension of the limit to six miles. It is infinitely more difficult to supervise the six-mile limit from the coast and I suggest, as has already been suggested by hon. Members on both sides of the House, that while excellent work has been done by the Fishery Protection Squadron, it is undersized, having only three frigates and six minesweepers.
It is impossible for them to police the coast properly with such a small number of vessels. I urge the Minister to do his best to see that the Squadron is augmented with fast motor vessels and, if possible, air patrol facilities, particularly helicopters. Only in this way will the fishermen feel secure and will we stop the present game of hide and seek. At present when a fishery protection vessel sees a foreign ship inside the limit, it chugs out after it at a small rate of knots, the foreign vessel goes round a headland, and, when the protection vessel has chugged round after it and lost it, the foreign vessel merely returns to its original position, and so the game goes on. Fast vessels and aircraft are needed to prevent this happening.
I conclude by returning from the particular to the general. Many of my hon. Friends will wish to attack the Government on the savage cuts which they have proposed in respect of inshore vessels, particularly those in Scotland, and my hon. Friend the Member for Edinburgh, West (Mr. Stodart) will deal with this when he winds up the debate for the Opposition. We accept the need for trawlers to be free of subsidies by 1972 and we must, therefore, accept a general 10 per cent. cut in operating subsidies. Equally, we believe that there is a similar case for freeing the industry from Government control in respect of building grants, which many people in the industry believe should correspond to those given to the shipping industry as a whole.
Above all, the Government must make up their mind whether they want to share, through the White Fish Authority, in a partnership with the industry—in which case they must hear their share of the cost—or whether they intend to allow the present drift, referred to in the White Fish Authority's Report, to continue. As the Fishing News said in an editorial in April of this year:
The British fishing industry is poised tremulously on the brink of what may he tremendous changes … handled properly, these changes could transform the industry. But we cannot meander into them … certain foreign countries have shown just how much can be achieved when fishing men and their governments work together to improve a vital industry.
In a later issue of that publication, it was stated in another editorial:
… under a wide and well-financed State scheme for fisheries, they could end the

present uncertainty and could place this country once again among the top fishing nations of the world.
I recognise the difficulties the Minister has had with the Treasury, which have been increased a hundredfold by the Government's mishandling of the country's whole economic position. I hope, however, that he will give the industry a more positive reassurance and show that it is the Government's wish to place this country among the top fishing nations of the world.

11.55 a.m.

Mr. James Johnson: I would be out of order, Mr. Speaker, if I asked you to express your feelings about the debates we have in the House. However, the longer I sit in the Chamber, the more I feel that hon. Members on the two sides seem to live in quite different worlds. Having just listened to my neighbour on Humberside, the hon. Member for Haltemprice (Mr. Wall)—and we both visit the Hull fish docks, although not together—I am reinforced in this view.
I give the hon. Member for Haltemprice the accolade of being the champion gloom monger of the fishing industry. I will quote authorities to show that the atmosphere among the Hull vessel owners, workers and dock hands is much more optimistic today than it was even 12 months ago, let alone five or 10 years ago. I listened with interest to the remarks of the Minister and I am delighted that, for the first time, we have a representative of the Scottish Office with us. I welcome him to these discussions.

Mr. Wall: The hon. Gentleman talked about being a gloom monger. Does he deny that Government policy has led the White Fish Authority to cut back on building grants in the last 18 months and that there is grave uncertainty in the industry over the non-introduction of a statutory price scheme?

Mr. Johnson: I will deal with those measures later. 1 want to be optimistic because the hon. Gentleman was so pessimistic and gloomy.
Our difficulty in the fishing industry, unlike those in the agriculture industry—and I am delighted to see my right hon. Friend the Minister of Agriculture here—is that we do not have the amount of statistics and facts available to our larger


sister industry of agriculture. It is in this connection that the White Fish Authority can play a leading part if we allow it to develop in the way that I will mention later.
I accept that, financially, the fishing industry is the Cinderella compared with agriculture, but it is a different kind of industry altogether. Again, I wish to start on an optimistic note by complimenting the Minister on having accepted the invitation which was extended to him after our last debate on the fishing industry to visit Hull. After a rather discourteous welcome in the West Country by the farmers, my right hon. Friend came to Hull and got a real Yorkshire welcome. The fish merchants had him for breakfast, although, after a busy day, he and I played the two local champion snooker players of the fish dock, and we won.
Visits by Ministers to the dock areas are extremely important, particularly when they discuss kindred matters like safety at sea. Recently, the Minister of State, Board of Trade, my hon. Friend the Member for Barnsley (Mr. Mason), visited Hull and met all sections of the industry; auctioneers, vessel owners and the workers on the fish dock. He, too, was given a fine welcome, and I am delighted to say that the Chairman of the White Fish Authority intends also to come to Hull. He is hard-working and extremely capable, and I will have more to say about him and his Authority later.
Apart from receiving a warm welcome, he will be given some keen questioning, since I must accept a little of the criticism that has been expressed by hon. Gentlemen opposite, in particular, the need to clarify matters. Many people in the industry are not certain about the work that is done by the White Fish Authority and we look forward to the Chairman of that body visiting us.
I come to the all-important issue about the competitive nature of the industry and what financial help is given by the Government. We are not only surviving but are more than holding our own against the tough competition which we face in the North Atlantic from the Germans, Scandinavians and the Communists with their State-aided fleets.
Last year—and here I come to this point about optimism or pessimism in

the fishing industry—Mr. Tom Boyd, Chairman of the British Trawlers Federation, said that he welcomed the improvement in earnings of all classes of fishing vessels. Looking at this year's figures, we find in Appendix 2 of the Report, page 25, that our landings are up by weight and by value quite a deal in 1965 as against 1964. This trend has continued in 1966.
I can also quote the Trawling Times oh this subject to show that all is not inspissated gloom. That publication states that landings are up again, and that the swing is continuing in 1966. So we are doing better. It is a success story in the financing and building of these modern deep freezers which must go these long distances into the Arctic and off Newfoundland.
I do deprecate, however, the amount of fish that is imported. The value of fish at present caught by British fishermen is about £55 million; but I am more than a little shocked to find that we import about £20 million worth of fish. This is not a good thing at all. If we are to carry out the recommendations of the Fleck Committee our job is to finance this industry by Orders such as we are discussing this morning, thus giving the industry sufficient aid to enable it to have a fleet in a condition not only to compete with other nations, but to supply our home market. We thus save imports, and so help our balance of payments at this difficult time. The Trawling Times states:
Big expansion of United Kingdom fleet of freezer trawlers. It is currently undergoing a period of rapid expansion.
This is the official journal of the Trawler Owners' Federation.
I sit behind my Minister and hear his attack upon my parsimonious Government, when the fact is that we are working in harmony with the owners and modern trawlers are being built. It is not just a matter of building ships to catch fish for the work gives jobs at Selby, Goole and other centres which badly need employment. Many of us thought, 12 months ago, that we would have 15 or 17 more of these big modern fishing vessels by 1967, but I am told on the authority of the owners' journal that there will be perhaps 40 of these deep sea vessels by 1967. This is the important factor in the whole industry. I


know that labour supply is important, but the fishermen must go to sea in new efficient vessels. Later, we shall want even bigger and better vessels if we have to fish in the South Atlantic and South Georgia.
At the same time, we must ensure that we do not have overbuilding. With hon. Members opposite, I believe that there is a case for a 20 per cent. grant for vessels, but, whatever we give, Her Majesty's Government must have a coherent plan and pursue it persistently and consistently, thus giving the industry assurance for years ahead of what must happen. I accept that in the past years we have been bedevilled as no other industry has by stop-go. I should like to see more go-go-go instead of stop-go.
Having said that, I must add that I do not want to see public money going into the big combines like Ross Group and Associated Fisheries. When Ross can afford to offer £18 million in the market to buy up a competitor, there is obviously plenty of money in deep sea fishing to be got at this time. Whether or not help is desired by means of statutory minimum prices, I am opposed to monopoly, particularly for Carl Ross and his empire. I believe that there was more than a chance of future public mischief had we allowed Ross and Associated Fisheries to combine. It would have meant at least the end of the British Trawlers Federation as I see it. I was a little surprised when the gentleman I have already mentioned as doing a first class job as Chairman of W.F.A. said that he would approve of this merger.
I am opposed to the continuance of "operating subsidies" based on the number of working days at sea. I know that the Order today lays down an annual tapering off of 10 per cent. That was the original undertaking following the Fleck Committee by both sides of industry. This will finish in 1972, but the industry is at present making quite a deal of money, as witness the recent take-over bid and other evidence. If the vessel owners are doing well they do not need the subsidy or, conversely, if they accept £11 or £10 per boat for each day at sea, they can offer better wages to their deckhands.
I say this because fishing is a unique calling. It is different from any shore-based job. Wives lose their husbands

for long spells. The men are now away from port on deep freezers for about 48 days at a time; and this could become perhaps 148 days if we develop our fleet with "mother" ships, engaged upon distant water fishing in the South Atlantic. Last Thursday, I said something which provoked a little flippancy in the Chamber. I then asked the Minister to consider making a sociological survey of the future effects of these long-distance voyages upon the families at home, with regard to future supply of workers in the industry.
Later, I look at the Report of the White Fish Authority and see that it has asked for such a survey of the labour supply and the future of the industry up to 1975. This will be done by one of the Departments of Hull University. We want a stable labour supply, and with it also a stable marketing system.
In parenthesis, I should like to refer a little more to working conditions at sea. Much was said in the House during the shipping strike about conditions in the merchant navy, but what about the conditions for the fishermen? The 1894 Merchant Shipping Act needs fetching up to date, and Section 4 of that Act applies to our fishermen. I am glad to see that it is being overhauled, for in this connection safety conditions at sea are relevant.
Dr. Johnson once said that going to sea was like going to prison, with the added risk of getting drowned. I get constituency cases where wives and widows come to me alleging that faulty gear on the ships have caused injury or even fatality. We know that every factory ashore that contains machinery is subject to the most stringent regulations under the Factories Act and, I submit that a ship is a floating factory. Our deep-sea fishing vessels are floating factories, but as far as I can see the only recourse for an injured man is to engage a solicitor and contest the case at common law in the courts. Perhaps the Minister would comment on that position when he replies to the debate.
Reference has been made to stability in marketing. Fluctuations in catches lead to gluts and it often happens that all the fish cannot be sold in the quayside auctions. The owners can sometimes safeguard themselves by establishing a fishmeal factory at the docks to


which the unsold fish can be sent. Nevertheless, I firmly believe that, like farming, fishing must have a solid base; the bottom cannot be allowed to fall out of the market. In my view a scheme of statutory minimum prices is an absolute must. We talked about this just 12 months ago, but nothing much seems to have been done, although I understand that the White Fish Authority is now in negotiation. I hope that it is getting the best co-operation of the fishing vessel owners in this respect. It is no good blaming the Minister here this morning; he must wait for the outcome of the deliberations between the White Fish Authority and the fishing vessel owners.
The Government have accepted the principle, the first Government ever to do so, of a statutory scheme. We are not at the moment offering money, but I suggest to the Minister that if we can give a £1 million loan to Indonesia or subsidies for farming, £¼ million to underpin the fisheries market would not be money ill spent. If it meant that we should get £½ million for the owners we could consider underpinning the next £1 million. This scheme is absolutely vital to the future welfare of the industry.
This leads me to speak of the function and purpose of the W.F.A. It is no secret that large sections of the industry, fish merchants, Trade Unions and others are a little puzzled about what is done by the Authority. Maybe the Authority does not give the best image of itself or publicise itself as much as it might. It was attacked in this House last Thursday by the hon. Member for Wycombe (Mr. John Hall) and it was given only tacit support from the benches opposite. I find that the Chairman of the Authority, Mr. Roy Matthews, is first-class. His courtesy and efficiency are beyond doubt, but I feel that he is perhaps hobbled because the so-called Authority has too little authority.
I will quote two sentences from paragraph 125 of the Annual Report which is before us.
we … feel that the processes open to the Authority for the formulation of Schemes are so slow in operation and so uncertain in outcome that the scope for action is limited.
… the Authority's powers seem to us too wide in their generality and too inadequate in detail to be fully effective in application".

The paragraph goes on to say that the Authority needs from the Government
a more positive attitude towards the country's fishing industry and perhaps some fresh talk about the powers necessary to a strong public body...
There is no parallel to this Authority in agriculture. There are the Egg Board. the potato board, and Tomato Board. Do we want a Fish Marketing Board? I have just been in Norway and I find that nowhere except in one small place in Norway is there such as our auction markets. Is a board feasible or desirable? It would need to have the consent of the majority of the vessel owners and others in the industry.
I visualise giving the White Fish Authority much more power, for example, to lease the St. Andrews Fish Dock, in Hull. The important thing is that the White Fish Authority will not only have a statutory minimum prices scheme, but will have a much larger share in the control of quality of fish besides the quantity. It is very important that this should be considered today. This debate this morning is the only chance we have in the House of looking at the industry which is so vital to our constituents and ourselves. Only once a year are we allowed to voice our thoughts in this way on behalf of the industry on the Humber, Fleetwood Aberdeen. My Scottish colleagues will speak for themselves about the position in Scotland later.
I hope that the Minister will think about the problems which are so much in our minds. This is a lonely industry which needs help and care. The White Fish Authority is doing a very good job in development and research, but what about training and education? What can it do in the way of helping to shape syllabuses in the Hull Nautical College, which educates and supplies workers for crews on Humberside? No one wishes to give the Authority the powers of the National Dock Labour Board, but what about industrial relations and casualisation in the fishing industry? It is the least well disciplined of all industries. and it is important that it should have registration schemes.
I have a healthy belief in the future of this industry, but to survive it must be dynamic. It must not only expect change, but must accept change. The


oceans cover 70 per cent. of the world's surface. Out of these waters must come the proteins needed to feed the starving millions of Africa and Asia. For many, there is no other source of food. Whenever I go to Africa I find that in every emergent black dominion the first job considered is how to get a fishing fleet. Long ago, Norway began to send cod fish to Lagos, but now Nigeria must have its own fishing fleet to feed its own people. The only place in the world left with large deep waters is the circumpolar region of the Southern hemisphere. There the food protein which is vital for Africa and Asia.

12.18 p.m.

Mr. W. H. K. Baker: I feel strongly tempted to welcome English colleagues to this debate because the bulk of hon. Members present represent Scottish constituencies. To Scotland, fishing is of vital importance. It is of vital importance to the area which I represent, as I hope to show in my speech.
Before turning to the actual Orders, I wish to quote from the Fleck Report, which says, in paragraph 354, on page 153:
The continued payment of operational fishing subsidies at assured minimum rates appears to us to offer the only practicable means of avoiding a shrinkage of the fleet.
It is against that background that we should be examining the Orders today. This is particularly pertinent as regards the manning of the boats in our harbours. I hope to show that with less income compared with industry generally it is very much more difficult to recruit crew members for these vessels. It is imperative for the future of the industry that we should have apprentices and others coming forward to learn the job and eventually possibly to have boats of their own.
I wish to deal particularly with the inshore fleet in relation to the subsidies. As I see it, the total reduction of the subsidy is of the order of 33 per cent. for the inshore fleet. As my hon. Friend the Member for Haltemprice (Mr. Wall) mentioned, there is a reduction from Ell million to £840,000 in the year which has just started. I wish to relate this to boats of between 40-ft. and 60-ft. in length. There are 346 of this type of boats in Scotland and in my constituency

there are 277 of the entire fleet and 91, or a third of that fleet, are under 40-ft. in length. The reduction which we shall have to face for vessels of that size is of the order of £925 a boat, which is of enormous importance.
It is important to realise that these inshore vessels, are operated by what is known as share fishermen. This means that half of the incomes goes to the boat and gear owners and the other half to the crew. It is extremely difficult to work out the arithmetic, because the subsidies run from August to July and the reports we have of the fishing industry run for the calendar year.
If we take an average year, the number of days the inshore fisherman is at sea is of the order of 220. If we take my figure of £925 per boat lost, that means that the crew loses over the year, because of the share fishing arrangement, about £500, or £100 per man per boat, if the average crew is taken as five. Looked at in another way it means that the crew are facing a reduction of 10s. per man per day at sea. The working week averages 4½ days, which is 80 hours at sea.
When one compares the average earnings for these men last year of 5s. per hour with the average hourly earnings of men in other industries, one sees that there is a great discrepancy. This has a great bearing on the manning of the vessels. This amount is to be reduced. What other industry would take such reductions without quibbling and what other industry faces such enormous hazards as the men in the fishing industry, particularly the inshore fishing industry?
Regrettably, it is almost a commonplace during our winters to read of perhaps two or more men being lost overboard. Of necessity there are no such things as guardrails on a seine net vessel. It is impossible to fit such safety devices to the boats because of the way in which they work. I have been at sea in one of these seine net vessels in half a gale and I was thankful to get ashore again. These men face that kind of hazard every day. The very least that we can do is to support them to the full and to implement the various suggestions and reports made over the years, not least the Fleck Report.
It is a misnomer to call these seine netters inshore vessels because they often operate at between 80 and 200 miles from the shore. Some of the vessels from my constituency are at present operating off Shetland, which is certainly not an inshore operation. I admit that part of the reductions that these smaller boats are to suffer by way of subsidy is due to the changeover from the stonage rate to the daily rate. Surely this vast and savage cut, as my hon. Friend the Member for Haltemprice has described it, is pretty severe in one year.
The Fleck Report suggested that a stand-by fund should be set up to help in such cases as these. An average reduction of 331 per cent. in one year for these boats is far too great and far too much to expect the fleet to take at once. There are two other classes of boat which I would like to mention. There is the 60-ft. to 65-ft. class, which will face a cut of about 12 per cent., or £250 per year, which means that each crew member will receive 2s. per day less. There is also the 65-ft. to 80-ft. class of boat which is facing a reduction of 15 per cent. in subsidy. That is £380 a year or 2s. 3d. per man per day at sea. Overall, it is true to say that the smaller the boat the greater the cut there is to be in the subsidy.
It is all very well to say that earnings are going up, but we have to set increased costs against that. It is vitally important that this should be realised. The imposts which the Government have put on the entire country have a vital effect on the fishing industry, no less than on any other industry. Last year, the industry had to face new costs in fitting new safety devices, lifesaving rafts and so on which are now statutory. Fire-fighting equipment also had to be installed. Modern vessels, to keep up with the Jones, and to take advantage of technological advances, have radar scanners and many other devices. All of these have to be paid for or else there has to be an annual hire charge, which is high.
There are no compensating factors for these increases. It is said that the increase in the necessary refits for each year are now more than £100 in excess of what they were two years ago. Again, these refits have to be faced because they are necessary, either because the White Fish Authority, quite rightly in my opinion, demands an annual refit, or because the

insurers of the vessel demand it, so that the vessel may retain its seaworthiness.
One thing and one thing only which I would like to welcome is the change in the subsidy for prawns. In the past, it was very unfair. Now, with the new Order that we are discussing, if more than 51 per cent, of the catch is white fish and 49 per cent. is prawn then the stonage rate is paid for the white fish. That is good. May I return to the crewing difficulties being experienced. It is now very difficult to get crew replacements and even more difficult to get young men to come forward for training.
As earnings fall it will be more difficult still. Some local members of the Inshore White Fish Producers' Association are working schemes of apprenticeship, whereby a boy leaving school can be taken on and paid £5 a week. If one takes the average crew of a seine netter as being five it would be far fairer, in the way of subsidy payment, to pay that seine netter £1 per man per day at sea. The object of this is not only to stabilise the subsidy position and make a firm basis from which further advances could be made, but also to ensure that there was sufficient cash coming in to enable these apprentices to be taken on.
I would like to quote from the edition of Fishing News of 22nd July, when the leading article spoke of the fishing industry and the subsidies. It said:
The British fishing industry is set to move ahead. What it lacks is the co-ordinating drive which industries in many other countries has had from their governments.
That is perfectly true. If we examine the fishing industries in the Scandinavian countries that becomes very apparent. It goes on to say, in the same leading article:
The dwindling subsidies reflect what the White Fish Authority so aptly calls ' a vague aspiration towards viability '.
What the fishing industry needs more that anything else is stability and a target. Agriculture have got those to a large degree—certainly not enough, but the fishing industry largely lacks them.
We could, I suppose, compare these Orders that we have at this time each year with the Price Review for agriculture; but it is in agriculture that we see only a 2½ per cent. reduction in subsidy a year as a statutory maximum, whereas here we are facing a cut of 10 per cent. a year and, as I have pointed out, as


regards the smaller boats a much greater reduction.
It is all very well to say that these reductions can go on, but I would point out that in my constituency the fishing industry is the be all and end all of many of the coastal towns. If the industry runs down, if for want of Government support and Government initiative boats have to lay up and crews are paid off, we shall accelerate and greatly increase year by year this grave problem of depopulation.
Therefore, the fishing industry should be looked at not in isolation but as part of the whole country, from the point of view not only of its production but of its value to the component industries such as boat building and so on. Unless our industry gets as much encouragement as fishing industries get in other countries from their own Governments, we shall increase the difficulty in the development areas.
Some hon. Members have already mentioned the statutory minimum price. The Minister of Agriculture, in a reply last year, said that the Government gave such a scheme a general welcome, but I think the industry expects the Government to give it more than a welcome. It requires teeth.
Other hon. Members have referred to the While Fish Authority and its splendid work. I should like to pay tribute to the Scottish Committee, under Sir John Ure Primrose, which is doing a splendid job of work and which would do a great deal more and be of more assistance to the industry had it more resources. There have been many complaints about the lack of cash for grants and loans for new vessels.
As has already been mentioned, the Government must look to this problem and must produce more cash. I know that it is very easy for hon. Members, particularly on this side of the House, to ask the Government for more and more, but I say in all sincerity that this is a vital matter to the industry and to the people around our costs particularly in the remoter areas.
I conclude by referring to the Trawling News and an article in its July edition. It is an extract from the annual report of the White Fish Authority:
We believe that proper exploitation of the sea's resources and the future provision of an adequate supply of British-caught fish will

require from the Government a more positive attitude towards the country's fishing industry and perhaps some fresh thought about the powers necessary to a strong public body which can help formulate and carry out long-term policy.
That, in a nutshell, is what we on this side of the House would like to see for the fishing industry.

12.35 p.m.

Mr. Donald Dewar: Aberdeen Harbour lies within the boundaries of my constituency and five times as much fish in weight is landed there as in any other Scottish centre. It is also the home port of the only really significant middle-distance fleet operating from Scotland and it is about the difficulties and troubles of that sector of the industry that I want to speak.
We have indeed very definite difficulties and special problems. We have had at least one authoritative explanation of these difficulties coming forward since the House last debated the fishing industry, and I should like to recall some of the things which have been said in that authoritative diagnosis and indeed prognostication as to the future possibilities in Scotland.
It was said that the inshore fleet was relatively prosperous and that it would continue to be so, but the middle-distance fleet—and in the Scottish context, by and large, this can only refer to Aberdeen—was said to be suffering from over-fishing, low prices, competition from freezers, the loss of prolific traditional fishing grounds, and that, above all, it was suffering, from the fact that the old traditional advantages of quality were being eroded, presumably because the freezers were coming in to the Southern ports and challenging the market.
This gloomy packet of prophecies was nicely summed up in the judgment that
Clearly, fishing even with its ancillaries is not to be looked to as a growing source of employment. The real question is the speed at which it will decline.
All these quotations come from the White Paper on the Scottish Economy, 1965–70 —from the Government themselves. It is against this background that I want to address myself to these proposals before us today.
I want to make it clear that I do not accept that the outlook for the middle-distance fleet in Scotland is anything like as gloomy as that. In fact, I cannot afford


to entertain such a thought. Anyone who comes from Aberdeen knows that the fishing industry in Aberdeen is basic to the prosperity of the whole city. It is an essential foundation on which this prosperity must be built. However much we may talk about diversification, it is inconceivable that any other industry will challenge the fishing industry in my area, not only because of the fleet itself and its ancilliaries, but also because heavy industry is represented in Aberdeen largely by two small building yards which fall below the level set by the Geddes Committee and which, to survive, must specialise in trawling.
In passing, I may say that if there is one reason why I am glad that the Monopolies Commission decided not to authorise the Ross-Associated Fisheries merger it is the casual remark made by the Ross Group that if the merger had gone through all Associated Fisheries orders which are an important part of the order book of the Aberdeen yards would have gone to Selby. That is a very uncomfortable prospect and shows how precarious is prosperity in this industry.
I am not asking, the Government to say that they will put on one side the principle which has been accepted on both sides of the House that the deep sea subsidy should taper off and be eliminated by 1972. That would be far too bold a thing to ask, and it would not be accepted. It is not possible, and I do not think that we would want it even in Aberdeen. But I think that the whole matter should be looked at in a much more flexible manner. I accept that at the moment we have not very much choice, that the Sea Fish Industry Act, 1962, has got these principles enshrined in it, and that this follows the recommendations of the Fleck Report which are accepted by all sections of the industry.
I concede that we have had a good year. I accept that the total white fish catch for 1965 is in the region of 900,000 tons, which was 8 per cent. up on the year before, but I would point out that the White Fish Authority says that this is due largely to an improvement in the inshore catch, and we, of course, are not dealing with the inshore fleet.
It is also pointed out that the value of the white fish catch in 1965 was 3 per

cent. up in England, but was about 14 per cent. down in Great Britain as a whole and I can only draw from that a sad conclusion on the value of the Scottish catch as compared with the rest of the country.
I was very pleased that my hon. Friend the Joint Under Secretary of State made it clear that while the deep sea fleet was doing extremely well he was aware, and therefore, the Government were aware, that the near and middle water fleets are less prosperous.
I remind the House—and since so many Scottish hon. Members are present it is a case of reminding the House—of what was said by the Minister of State for Scotland in the Scottish Grand Committee debate on the Scottish Estimates on 15th July, 1966. He said:
Certainly, in 1961 and 1962 the difficulties encountered by the near and middle-water trawlers made it look as though the prospect of viability by 1972 was very poor, but the better results of 1963 and 1964 have been encouraging, and for the time being we are continuing the policy we inherited. We shall of course, watch developments very closely."—[OFFICIAL REPORT. Scottish Grand Committee, 15th July, 1965; c. 281–282.]
If that is still the policy of the Government—and I hope that we shall have some reassurances on it—I shall not quarrel with it. If they are willing to show that degree of flexibility, if they are willing to realise that hard times may come again and be willing to look at their subsidy policy very closely as developments come, nobody will have any real complaints. The British Trawlers Federation accepts that by 1972 these grants should be entirely eliminated. The "big boys", such as Associated Fisheries, have made public their belief that this should happen.
But it is easy for the big firms who, as my hon. Friend the Member for Kingstonupon-Hull, West (Mr. James Johnson) said, have a great deal of money and resources, to take this kind of attitude. It is not surprising that Associated Fisheries, the Ross Group, the Boston Deep Sea Company, which between them own about 40 per cent. of the total English deep sea fleet, should be in a position of strength.
In Scotland, however, there are about 130 vessels of over 140 ft. and while there are four big units in the fleet there are still many small owners. The small units


do not nave the financial stability to be able to turn their back on subsidies with such cavalier confidence. I hope that the Government will remember that the W.F.A. said on page 26 of its report that there is a very doubtful future for small units in this industry.
Small units still abound in my part of the world, and it may well be necessary to have a quite lengthy transitional period to help them over their difficulties. My predecessor as hon. Member for Aberdeen, South drew attention in the Scottish debates last year to the fact that the catch of both the near and middle-distance fleets in England and Scotland were almost exactly the same tonnage in 1964, but the price obtained was about £4 million lower in Scotland than in England. In Scotland, thus there is not only fragmentation of ownership, but much lower prices than south of the Border. There are explanations for this, but explanations do not help to remove powerful economic facts.
I turn to one other feature in the future of the Scottish middle-distance fleet. It was said in the White Paper that our traditional advantage of quality was beingeroded, presumably because of quick freezing at sea by the big freezers, and because the fresh fillet was not such a commanding influence on the fish market now.
I do not accept that. I would not like to have to accept it, because we have no freezers going out of Aberdeen. We have a middle-distance fleet of about 114 boats over 80 ft., but none of them is a freezer; and indeed we have only two craft over 140 ft., in the fleet. This compares with about 180 craft going out from Hull and Grimsby in this category and that includes the 11 freezers and three factory ships at present going out from British ports. My hon. Friend the Member for Kingston-upon-Hull, West referred to the fact that the W.F.A. expected the number of freezer trawlers to go up to about 40 within the next five years. While grants are immensely important—I welcome the 35 per cent. grant for boats over 80 ft.—while I accept some of the criticisms from hon. Members opposite and I accept the importance of modernising Aberdeen's

fleet, I know that it will be difficult to break into freezers.
We must make our future, in fact, on the landing of fresh fish. This may be a hard row to hoe, but this emphasises what I said before, that there are special problems in our area, with low prices, the small units and a specialised future and I hope that this will receive some consideration from the Government.
We must spend a lot of time, money and thought on handling methods, on boxing methods, and put our own house in order and get rid of the ridiculous scrap over the future of Aberdeen Harbour and the berthing arrangements at the weekend between seine netters—who arouse a lot of interest on the benches opposite—and the middle-distance fleet.
But when one looks at the official results for Aberdeen trawlers in the last few years, it was only in 1964 that there was any kind of reasonable return on capital, that depreciation was covered, and that there was any kind of profitability in the industry. Even then, subsidies played an immensely important part in that profitability. I hope that all these things will be remembered in considering future policy.
I endorse the remarks that were made about the minimum price scheme. The British Trawlers Federation and the Scottish Trawler Owners' Federation march in complete agreement on this. They want a minimum price scheme. It is significant that the B.T.F., while it wants subsidies eliminated by 1972, says that this is conditional on a good minimum price scheme or, even better, a statutory support scheme being introduced. I hope that the White Fish Authority will receive every support from the Government, and I hope that they will reconsider their decision not to give Treasury support to such a scheme.
I understand that the Authority estimates that an adequate scheme would cost only £1 million. I say "only" because in view of such benefit in stability to the industry and the opportunity for forward planning that it will give, it would be extremely cheap at the price.
I do not need to remind the House of the industry's importance. I have already mentioned its immense importance to me and to my constituency. At the present time of economic uncertainty,


it is even more vital. We have had references to increases in imports now amounting to £19–2 million in 1965 compared with £17·7 million in 1964. This is signficant and it also alarming.
I agree with the people who praise the work of the W.F.A. although I accept some of their reservations about the longterm future if it does not receive adequate support from the Government. It is disappointing that only £75,000 was its total budget for the promotion of fish in this country, at a time when consumption per head had dropped by about 3 per cent. last year to 18·8 lbs.
It is all very well going on with fish farming experiments, but it is not exactly an encouraging prospect. The plaice were more than decimated in the Ardtoe experiment—and that is a considerable understatement—and it is clear that we shall have to rely on a viable fishing industry at sea for a long time. Whilst I accept that subsidies will ultimately go and must be reduced as quickly as possible, I hope that this will not be done in an arbitrary way by a series of preconceived steps which have absolutely no connection with conditions at the time in the industry.
Let us not forget, as all official reports this year have stressed and as several hon. Members have already said, that this is a cyclical industry, and if the bad times of 1961 and 1962 come again, as they could so easily, the Government must not find themselves bound hand and foot to a pre-arranged programme which will wreck the fishing industry in areas like mine.

12.50 p.m.

Mr. Alasdair Mackenzie: The debate is of great importance to those parts of the country where fishing has been the major industry and still is the major industry. In the Highlands of Scotland, agriculture and fishing have been the source of livelihood of the population for generations past. After the war years, there was a marked decline in fishing, but one is happy to note that there has been a revival of interest over the past few years. What is really encouraging is that many young men are now prepared to carry on the tradition provided that the business can be made reasonably remunerative.
This willingness on the part of young men to take up fishing is quite contrary to predictions made in the not so recent past. In these parts of the country, many people thought that fishing would continue to decline. We welcome this change in the attitude of our younger men, and we are particularly glad of it because no one will pretend that fishing is an easy way of life. It takes men of courage and endurance to withstand the hazards involved.
If we are to attract more young men to the industry, and if we are to retain those who have joined the fishing fleets recently, we must give them reasonable long-term prospects. In my opinion, this is just as important in fishing as it is in farming.
The changes in the subsidy arrangements now being made go against the best interests of fishermen in certain parts of the country. In the constituency represented by my hon. Friend the Member for Bodmin (Mr. Bessell) this is particularly true. The only fish consistently present in those parts is the pilchard. The pilchard is common to the coasts of Cornwall and Devon, where it is taken in large numbers, but in recent years the fleet has declined, partly because of the importation of canned pilchard from South Africa at very low prices and partly because foreign trawlers were stripping the beds. However, with the recent improvement in the price of pilchard and the protection afforded by the 12-mile limit, pilchard fishing has revived considerably and young men are going back to the boats.
The effect of this new form of subsidy based as it is on the number of trips will he disastrous in the West Country ports, and what is disquieting is that fishermen received only nine days' notice of the proposed change. The best example I can give from my hon. Friend's constituency is the case of a fleet of six trawlers during the week ended 16th July. The amount of subsidy paid was £400. If the new system had been operating during that week, the subsidy paid to that fleet for the same catch would have been £142. The House will realise that the new system represents a very bad deal for those fishermen. For that reason, I suggest that the Scheme be suspended for a further three months and an opportunity afforded to the various interests concerned


to get together to see how the situation could be improved in the interests of that particular area.
Compared with other nations, we have been very backward in our attitude to the fishing industry. The Government must recognise fishing for the asset it is and for the very substantial contribution it is making and can make to the nation's food resources, and this at a time when it is imperative that imports should be cut to the minimum. I have been very glad to hear hon. Members on both sides stress this already.
As has been said, this is the one day in the year when we can take stock of the industry and its prospects. In considering the question of subsidies, we should pay particular attention to the long-term prospects of the industry. It will be generally agreed in the North of Scotland that the Highlands and Islands Development Board must pay particular attention to fishing in whatever plans it may have to bring prosperity to the region. The Board may be reluctant to deal with the all-important land question because of the considerable political issues involved, but fishing is perfectly straightforward.
I hope, therefore, that the Board will get down to dealing with the fishing industry with real vigour. One is very glad to know that the Board has already subsidised a number of boats. As this is confined almost entirely to one small area, it shows the possibilities if one takes the region as a whole.
I am convinced that the present is the right time for the Government to help the industry by providing the necessary funds. In the Highlands, these funds should be channelled through the Highland Board, which can supply all the necessary information and is capable of advising the Government on the suitability and economic viability of all projects submitted. There must be a buildup of fishing fleets as well as improved facilities for the landing and processing of fish. This will provide work for ship building yards as well as for other trades, and it will prove a thoroughly sound investment in the long term. A great deal more could be done also in the way of research and market promotion. I have been interested to hear the emphasis which hon. Member have put on this already.
On the question of fishing piers, which are so vital for development, I am constantly reminded of the need for an adequate pier in Gairloch, in my constituency and of the need for a herring reduction factory. I hope that the Government will bear these two important projects in mind and deal with them as a matter of urgency.
It is interesting to see that, throughout the debate, the Scots are in a majority in the Chamber. This shows the importance which we atttach to fishing. In fishing, we have an industry with a wonderful record, and we are all convinced that it is capable of expansion. It has always been manned by a race of men who have made a contribution to the nation in times of emergency which is second to none. It is good to know that there are still men willing to carry on the good work. I plead with the Government to do everything to encourage them to carry on that good work.

12.58 p.m.

Mr. Gordon Campbell: Hon. Members on both sides have spoken of different sections of the fishing industry, so that we have already heard about the effect of the Scheme upon the deep water fleet, upon the middle water fleet and upon the inshore vessels. I was interested to hear what the hon. Member for Aberdeen, South (Mr. Dewar) had to say about the middle water fleet based on Aberdeen. I am sorry that he has just left his place. The hon. Gentleman referred, in particular, to the gloomy passage about the Scottish middle water fleet in the White Paper on the Scottish Economy, also called the Scottish Plan, published last January. I am sorry that the Under-Secretary of State was not in the Chamber at that moment, because he would have heard something which Scottish Members concerned with on both sides with fishing feel about that gloomy prognostication.
Like my hon. Friend the Member for Haltemprice (Mr. Wall), I welcome the hon. Gentleman to debates on fishing matters, a new subject for him. In other connections, we hear him claiming that the Government are increasing subsidies and grants. But he cannot do that today, because here we find what has rightly been described as a savage cut. In this, I am speaking particularly for inshore vessels, because it is, as my hon.


Friend the Member for Banff (Mr. Baker) pointed out, the inshore fleet which will be hurt particularly by this harsh reduction.
I had a Question down to the Secretary of State for Scotland on Tuesday, and in his reply he brought home what we had suspected about the savage reduction from one year to the next. The right hon. Gentleman said:
Assuming the same level of effort and catch in the year ending 31st July, 1967, as in the calendar year 1965, my estimates are £1,247,000 and £840,000 respectively."—[OFFICIAL REPORT, 26th July, 1966: Vol. 732, c. 252.]
That represents for the Scottish inshore fleet a reduction of about 33 per cent. and that is from one year to the next, and, as my hon. Friend the Member for Haltemprice pointed out, it starts in two days' time and we are considering these matters at the very last moment before the new subsidy system starts. As he also pointed out, much as we may dislike the savage reduction which this Order represents, there is little point in defeating it by vote today because that would mean that there would be no subsidies available at all.
I would point out, also, to the Scottish Minister that the effect on the inshore fleet concerns Scotland far more than England and Wales, because more of the vessels operate from Scottish ports than from English or Welsh ports. This was brought home by another Question which was answered only yesterday, a Question similar to my own, and asked by my hon. Friend the Member for Tynemouth (Dame Irene Ward). She asked what would be the estimates for the subsidy received by inshore fishermen in England and Wales in the current year and in the year starting in two days' time, and the answer to this indicated a similar order of reduction, but it also showed, from the figures for the current year, that two and a half times the amount was paid in Scotland as was paid in England, indicating the amount of activity of the boats employed from Scottish ports being about two and a half times greater than that at English and Welsh ports.
Therefore, the effect of this savage laceration in the subsidy for inshore white fishing vessels affects Scotland much more than England and Wales and is a matter which I hope the Scottish Minister

will report to the Secretary of State-1 am sorry that the Secretary of State cannot be here—because it is a matter which affects Scotland far more than the rest of the country.
Another point which hon. Members have already put is that it is the smaller boats which will be more adversely affected than the others. As my hon. Friend the Member for Banff reminded us, these boats are worked by share fishermen. These men, in seine net and other boats of the inshore fleet, are not concerned with 40-hour or 50-hour weeks. These men work enormously long hours and in the most arduous conditions, and these inshore boats are the ones which bring the high quality, freshly caught, fish.
One hon. Member who talked about the long-distance trawlers, the deep-water boats, mentioned that they had to be at sea for as much as 48 days. The fish which they bring back cannot be as freshly caught as that caught by the inshore fleet. This is the part which the inshore fleet plays, and more than two-thirds of it, as we see, is based in Scotland.
During recent months, it is true, fish have been more plentiful, and it seems that one of the main contributing factors to this was the extension to the 12-mile fishing limits brought about by the Conservative Administration, but one cannot be certain that this quantity of fish will continue. We know that fluctuations take place, and the fact that there was an increase in the amount of fish landed in the past 12 months is no guarantee that this will continue in the following years.
The effect of the Order we are now considering is that most of the boats will be on voyage—what are also known as daily—rates and the figures which have been fixed for these rates are surprisingly low. As the Minister knows, I have been very much concerned with getting a decision as between stonage and daily rates and I have at Question Time been able to point out the anomalies which have arisen when the two systems have been operating, so that boats of roughly the same size and with exactly the same catch can receive entirely different subsidies, one much greater than the other; and the incredible anomaly here was that because of the arbitrary method of classification it could be the larger boat which got the


greater subsidy because it managed to get itself classified as a smaller boat.
Now the fishermen, as, I think, the Under-Secretary said in his opening speech, have been clamouring to get this settled, and it was a decision for the Government. All the fishermen were not necessarily in agreement about what was the best method, but they were all agreed that one method should be selected and that it should be for the Government to decide; and the Government now appear to have decided upon voyage rates. They have none the less provided for a class of boats, under 60 ft. and over 35 ft., which can still be paid on the stonage rate provided they fulfil the conditions concerning £500.
I thought that the hon. Gentleman passed over this rather speedily in his opening remarks, and simply said this applied to boats which were engaged in part-time fishing. If that is so, I think this does largely explain the creation of this new class of boat to qualify for the stonage rate, which still remains, but when the Minister winds up, will he confirm that where Scotland is concerned he expects that this provision for paying stonage rates will simply catch boats which are on part-time fishing?
Can he say there will not be a number of other categories of boats which will come into this classification between 35 ft. and 60 ft. drawing stonage rates? Because unless he can make this clear some of the anomalies are likely to continue, and the provision will not be the clear-cut type of decision which the fishermen have been wanting.
I should like also to refer, as did my hon. Friend the Member for Haltemprice, to the minimum prices scheme. Other hon. Gentlemen on both sides of the House have pointed out that this was something which the fishermen have set store by, and the Government have given the impression that they did not seem to be opposed to such a scheme, but what the Government have failed to do entirely is to provide any kind of financial contribution to such a scheme, any kind of pump priming, and it seems clear that this is one reason why this scheme has so far failed to get off the ground. If the Government decided that they were going to make this very harsh reduction in the subsidies for the inshore fishing fleet, amounting on average, as we see,

to 33 per cent., could they not have set aside some of the money which the Treasury will save by this, some of that 33 per cent., and have used that—not all of it, but some of it—as a financial contribution to getting the minimum prices scheme going?
To have made these savage cuts and not to have made any contribution to this scheme seems to me to be the worst of all worlds. The fishermen were not expecting anything like a reduction of this kind. On the other hand, they were expecting some contribution by the Government to what is generally accepted to be a good scheme.
I hope that the Government will not consider it too late to think about that again, because I am sure—and I think that hon. Members on both sides have reached the same conclusion—that it is lack of Government support and of any tangible sign of financial pump-priming to get the scheme started which has so far meant that nothing has happened.
To sum up, a decision was required from the Government about the inshore vessels engaged in white fishing on whether the subsidy should in future be paid by voyage rates or stonage. Subject to the clarification I have asked for, concerning the condition relating to £500, it seems that the Government have decided upon voyage rates. But the figures they have selected for voyage rates for inshore boats represent a very harsh reduction in one year.
I am in favour of reducing subsidies where efficiency and other factors show that it can be done, but 33 per cent. in one year is an enormous cut. This will be very severely felt in Scotland and I and, I am sure, those of my right hon. and hon Friends representing Scottish constituencies, very much deplore the Government's decision.

1.12 p.m.

Mr. John P. Mackintosh: I am glad to follow the hon. Member for Moray and Nairn (Mr. G. Campbell) and the hon. Member for Ross and Cromarty (Mr. Alastair Mackenzie) on what seems a fairly united line of approach to the Statutory Instruments. What bothers me in this matter is a point mentioned by my hon. Friend the Member for Kingston-upon-Hull. West (Mr. James Johnson)—the lack of


adequate statistics and information about the fishing industry.
I take it from the rather brief opening statement by my hon. Friend the Under-Secretary of State for Scotland, that one major reason for pushing the inshore cut as far as it has gone has been the feeling that the inshore fishermen have had two very good years in 1964 and 1965 and can therefore afford this cut. This works on the assumption that they will have another good year in 1966 and as far as one can see ahead. The only evidence I have received for this was a remark by my hon. Friend the Member for Kingston-upon-Hull, West referring to a small paragraph in the Trawling Times
United Kingdom fish catch shows big rise.
This may well be true of the catch in deep sea waters but there is considerable evidence that for inshore waters 1966 is not going to be a good year. What bothers me is that we do not have sufficient information to judge on this matter adequately. In my constituency I have tried to collect such facts as I can get my hands on and I shall put them before the House.
In the major port of Eyemouth, the inshore fishing gross landings for the first six months of 1966 were down compared with the first six months of 1965 from 1,650.000 cwt. to 1,460,000 cwt. There are 13 boats operating from there and the gross value of their landings has gone down in these two comparable six months period from £94,300 to £78,500.
This is where I come to something of a statistical exercise. I have tried to find out the subsidies these boats have earned operating from Eyemouth and I have had the figures checked by the local fishing authorities. When the subsidy was at 1 s. 3d. per stone in the first six months of last year with landings at that level, the leading eight boats collected £6,899 in subsidy over the period. The subsidy was cut to Is. l½d. per stone in the first six months of this year. This, together with the reduced quantities, has meant that the subsidy earned by these same eight boats has fallen to £3,223.
If—and I do not know whether it is —this statistical evidence is repeated all round Scotland, it means, even before the present cut, a very heavy fall indeed.
What we should have had was a detailed piece of evidence on this and some argument as to what effect the present cut will have on the income of the inshore fishing industry.
I hope that my hon. Friend the Under-Secretary of State for Scotland will not mind my saying this, because no one could hold him in higher estimation than I, having heard his efforts in this House and on the floor of an even tougher chamber, the Glasgow University Union, in previous years. But I was a little shocked that the only evidence that he produced for cutting the subsidy so severely was saying that he knew of three boats which drew more than £5,000 per annum. Is this a substitution for accurate statistics? We all know three farmers who are rolling in money but that does not mean that the whole agricultural community is healthy and successful. We all know three people in other professions who are doing well. That is not a good method of approach.
I have tried to work out what the cut will mean for inshore fishing and it is hard to do this without knowing what the fishermen are earning. Here we are up against one of the failures of British administration in so many cases—inadequate facts. We are making policy in the dark. I have tried to find out what the inshore fishing fleet earns and it is almost impossible to say whether the inshore fleet's version or the Government's version is correct. I hope that my hon. Friend will be able to correct me at the end but I have been able to locate only a few facts.
First, Appendix VIII of the White Fish Authority's Report for 1965 points out that the surplus made by the Scottish inshore fleet was 14·1 per cent., of which the subsidy accounted for 11·9 per cent. If this cut comes into effect, that fleet will be making a loss. That is how I read it but I should be grateful to find that interpretation wrong. Secondly, the Fleck Report, in Table 17, showed that, in 1959, the Scottish inshore fleet had a 10 per cent. surplus, of which the subsidy made up 8 per cent. Again the evidence suggests that this cut would put that section of the industry into loss.
Going further back, the Fleck Report showed that average earnings of profit per boat in 1957 were £496. That again will


disappear with the present cut. if the general impressions and few facts we have about the profits made by these boats are wrong, perhaps my hon. Friend will tell us to w hat extent profits will fall and what the incidence of these cuts will be, because we have not had an adequate explanation so far.
One is driven back, as in so many aspects of British Government, on to impressions and these can be contrary and difficult to assess. My own impression of the situation in the inshore fleet is, as the hon. Member for Ross and Cromarty pointed out so well, that it is a dangerous and difficult industry, that the hours are extremely long and that many people are drawn to more comfortable jobs in different areas in the south or in England. There has been a big shake out of labour due to bad conditions and low wages in the late 1950s and the early 1960s.
If we are in for a cyclical downturn in the inshore industry—and there is no evidence that we are not—this cut could reduce the activity of the industry very considerably, and here we come to the other imponderable point of what size the industry should be. On this again we do not have any very accurate information.
The Fleck Report was written on the assumption that the industry must come down slightly in size and become economic. I accept the latter point but not the coming down in size. I have never seen the ground of that argument. There is, indeed, a good deal of argument in favour of selective expansion and the argument is chiefly a question of import saving. I do not like to argue with my hon. Friend the Member for Kingston upon Hull, West but I was surprised by his figures. On 25th July I asked a Question about import figures. I was shocked to find that we import 18 per cent. of the fresh fish, and 6 per cent. of the preserved fish which we consume. It means that we import one-quarter of all the fish that we eat in this country, at a cost of £66·7 million.
Surely, with our present chronic balance of payments problem, there is a case, not for cutting down the fishing industry, but for selective expansion, and this is where I often think that the Treasury can be extraordinarily shortsighted. If the expenditure of £2 million to £3 million in

subsidy will reduce our import bill by a large amount, or by a considerable amount, surely it is worthy of consideration.
We are in great difficulty because we have no idea—we have not been told, and no research has been done into this—what increase in subsidy would, or might, lead to an increase in fishing, and how far this would be an adequate substitute for imports. We should have research into this. We should know about it, and I feel that there is a strong case for not carrying through this cut, but for keeping up the level of subsidy to inshore fishing in an attempt to provide more of our own supplies of fish from our domestic fishing fleet.
Many issues have been raised during the debate. As far as I can see, everyone who has taken part in the debate thinks that a statutory minimum price scheme would be extremely valuable. All that it requires is a little financial support from the Government, and I cannot see any argument against this when we are struggling for foreign exchange.
To keep this industry competitive we want improvements in marketing and in processing. Indeed, I have never heard a satisfactory explanation why, of all the Fleck Report's proposals, the Government decided to implement the paragraphs recommending cuts in subsidy, and decided not to carry out the recommendations about organisation, marketing, a statutory minimum price, and all the other aspects referred to in the Report. Indeed, I have never had an adequate expalanation of the Government's policy on fishing matters, and this gives me the feeling that neither we nor they know where we are going on this question.
I was distressed to find that the White Fish Authority comes out with almost the same conclusion. In its Report for this year it says:
The need, as we see it, is not so much for a vague aspiration towards viability but rather for proper planning of the fishing industry's part in the country's primary food production.
The Report makes what I think is the strongest complaint a Government body could make that its plan has not been adequately carried out.
In the interests of the inshore fleet I feel that we should suspend this cut, reexamine the position, get accurate facts on the state of the fleet and its earnings,


on its labour force and on its prospects of expansion as an import substitute, and until we do all that I should like to see the cut withheld for the coming year.

1.23 p.m.

Mr. Patrick Wolrige-Gordon: I agreed with just about every word of the speech of the hon. Member for Berwick and East Lothian (Mr. Mackintosh). It was a strong indictment of the Government's policy. Oddly enough, the only part of his speech with which I did not agree was his personal onslaught on his hon. Friend the Under-Secretary of State for Scotland, who came into this debate without great personal knowledge of the industry. He said that this was the first occasion on which he had spoken in a debate of this kind, but I thought that he did a good job.
Those who go to sea, as well as those who work on shore, do a grand job in supplying a first-class product. They often work in arduous and unrewarding circumstances, and I take this opportunity of saluting all that they do.
What concerns me is that it is the smaller fishing boats in Scotland, and around the English coasts, on which the Government's policy will bear most harshly. The subsidy is to be reduced by 10 per cent. overall, but in fact it will be much more than that on the smaller boats. In 1965, the subsidy to the Scottish inshore fleet was £1¼ million. This year, it will be more like £840,000, which is a cut of 34 per cent. Even accepting the transition from stonage to daily rates, which I have urged for some time, these cuts are still far too large. They offend humanity itself, and I urge the Government to reconsider them.
I would oppose the Government proposal were it not for the fact, as was brought out by my hon. Friend the Member for Haltemprice (Mr. Wall), that if we were to oppose this reduction and defeat the Government, which I imagine we would do, judging by the attendance in the House today, no subsidy would be payable to either the Scottish or the English fleet until three months had elapsed, the time it would take to get another Order through the House.
It is difficult to accept a wage freeze, in any event. It is almost impossible to

watch one's wages melting away at the same time, because this is what will happen to the fishing industry if fish prices remain frozen and this reduction in subsidy comes into effect.
My hon. Friends have spoken about the effect of these measures, particularly on the white fish boats, and I do not want to go over that ground again, but the owners are the men who will have to find this extra money. It is increasingly becoming the practice to pay the crew the subsidy direct by way of wages. If owners want to keep their crews, which I hope and trust they will, they cannot be expected to tell their men that they will have to take a reduction in their pay because of Government policy. The owners will have to find the extra money themselves, which it will be difficult for them to do because of the rise in costs, the drastic cut in the subsidy last year, and now the effects of the Selective Employment Tax. This means that the Government have accepted that not everyone now in the industry will be able to continue in it.
I deplore this, because Scotland used to lead the world in fishing, particularly for herring. I believe that she can do so again, but it will need an imaginative expansionist policy with that definite aim, and not using the axe, the use of which the Government used to bewail so loudly when it was in the hands of Dr. Beeching, but which they have used so indiscriminately ever since they confiscated it after sacking him.
The proposed subsidy for 40 ft. to 60 ft. boats is £5 a day at sea. For 60 ft. to 80 ft. boats it is £5 13s., and for boats over 80 ft. there is an astronomical leap to £10 10s. per day at sea. This has caused discontent among the herring fishermen. The 40 ft. to 60 ft. boats are mainly ring netters, which last year made one-third more profit than the larger boats, mainly drift netters, vet they receive only 13s. less in subsidy for four fewer in the crew. This does not seem fair, but the other distinction is even worse. Ten guineas are to be paid for boats over 80 ft. long, and in Scotland they say that all this money is going to the English boats, because in Scotland we have few, if any, herring boats over 80 ft. long.
I am disturbed about the situation. The Government say that the over 80 ft.


boats are the only class which made a loss last year, yet some actually grossed more than the Scottish boats. Their loss comes—if there is a loss, and I am sure there is—from working in companies with able accountants who can put this against that, arid because they pay for services to gear, sums which the Scottish boats would never entertain for a moment.
Instead, their families do the work for nothing. The moral is that the English herring fleet has all but disappeared. In 1964, the Scottish herring fisheries landed 1 million cwt. and the English herring fisheries landed only 700,000 cwt.—and I would wager that the great majority of that was landed by Scottish boats. Unfortunately, the relevant figures are not available.
In 1964, against 148 Scottish drifters, the English could field only 19, and 1 believe that figure is still decreasing. The Scots feel that the independence, integrity, hard work and the system of organisation of share fishermen—the energies which have kept their fleet going while the English have failed, and which has ensured that our country has a herring industry—is being undercut by the disproportionate subsidy allocation to an ailing and infirm fleet and, by comparison with the Scottish, an inefficient one.
The present flashpoint in the herring industry policy is the question of oil and meal. I want to know where the Government stand on this. They have cut the subsidy once again, and in the language of the day in Britain that means that they do not want herring caught for fish meal and oil. Yet their nominee, as Chairman of the Herring Industry Board, is quoted in the Fishing News of last week as emphasising that they had to have a surplus of herring. "Future in Purse Seines ', says H.I.B. Chairman," was the headline.
Fishermen are far from fools. They know that the Herring Industry Board built several fish meal factories round the country, at considerable public expense, and that in spite of the fact that the Board is encouraging them to catch more herring and to employ new methods to do so, it sold out its fish meal factories and more or less washed its hands of its responsibility for this essential market for surplus herring, while Continental countries were building new factories. In Norway, there are 200 fish

meal factories. The herring meal produced for the first half of 1966 totalled 220,000 tons, an increase of over 50 per cent. above last year.
Compare this with Britain. Our fishermen know that after their surplus catch is sold in this country it is exported to Norway, converted to fish meal, and re-exported back here, where we spend £21 million each year for the privilege. Our fishermen think that this is ridiculous, and as they have to pay 3s. 6d. on every cran they land they also think that it is wrong—and I do not blame them. They know that if they sell herring for fish meal direct in Scandinavia they get a more economic price for the product than if they sell it here. I hope that the Government can tell us something about this situation.
Now the Herring Industry Board is asking fishermen to put in money to build co-operative fish meal factories. Understand that the fishermen at Mallaig are ready to do it on their own—no Scottish fisherman would risk his money with the Board—but have been told that no development money was available. The only other project I know of at the moment is a fish meal factory at Avoch promoted by Herring By-Products Limited, of Aberdeen. I wish it well, but it seems more related to the vast-influx of sprats in the Inverness Firth last year rather than to industrial fishing. Even if it is not, it is still not adequate to answer the fishermen's concern about possible markets for their fish surplus if they go in for industrial fishing with the purse net.
The other question that fishermen are asking concerns gear. The Board has made a grant of 50 per cent.—and I should have pointed out that all the time I refer to herring I am also referring to the Board—on an experimental basis to have vessels fitted out with the purse-seine net. Were they Scottish boats? We have not been able to find out.
I also ask the Government what they propose to do about all the others who would like to fit out with the purse-seine net but lack the cash to do so. The gear is formidably expensive. I know men who would like to do this and who have not been able to do so because the present loan available under Government policy is not adequate. They would have to find too great a proportion of


capital. What will the Government do about that?
Very great discontent still exists among herring fishermen about the way in which public money is handled in this industry The Government are too secretive about the purse-seine, for example. Another example is pair trawling, which is a recent development in the Scottish herring industry. Pair trawling was pioneered last winter. One or two owners asked for an experimental grant so that they could do this work with particular types of net, but they were refused, on the ground that they had already made enough money. Two or three months later they discovered that other boats were receiving grants for the very experiments in respect of which they had been refused money.
I cite these examples not only for their importance in themselves, but to prove to the Government how necessary it is for this industry that its administration should not only be fair but should be seen to be fair. This could be one of the greatest industries in our land, but to make it this would need what Pravda would describe as a crystal-clear character in which everything could be seen to work sensibly.
I turn next, to the question of conservation. The catching power of the purse-seine highlights this problem. I asked the Secretary of State for Scotland about this yesterday and he said that the effects were being studied, and that the fishermen could carry on in the meantime if they wished. I agree, but it does not need international councils and scientific exploration to establish that if you only take from the sea and never give or conserve you are eventually going to do it once too often. That is absolutely true of farming, and it is obviously true of fishing. It is probably true of everything.
The human race has not always been too impressive in restraining the slaughter of the goose which laid the golden eggs. They did it to the buffalo, they have done it to the whale, and it is likely that they will do it with herring. Thank goodness that Divine Providence always seems to have another card up his sleeve when it happens. I am quite happy to go ahead but this is an issue which we should at least bear in mind in considering the future of the industry.
My hon. Friend the Member for Haltemprice spoke about the Government's decision to remove the ban on the landing of berried lobsters. We have been watching correspondence on the subject in the fishing Press with considerable interest. I understand that in the past this ban was difficult to enforce, and that the only two areas which enforced it demonstrated the practicability of the policy beyond peradventure by catching over half of the lobsters sold in this country, and attracting to its coast, in pursuit of the same fishing, boats from other parts of the country who, by catching berried lobsters and scrubbing them, had destroyed their only stocks.
Have the Government considered the experience gained in other countries on this subject? I understand that in countries like Greece and Italy, where there is no limitation on the landing of berried lobsters, stocks have disappeared, whereas in America and Canada, where this policy has been applied, they have an exceedingly successful fishery and land thousands of pounds' worth of lobsters every square mile. We must be more responsible about the future of our lobster stocks and our fishing stocks generally.
In Scotland, fishing is a basic industry. I agree with the hon. Member for Aberdeen, South (Mr. Dewar) about its importance to many of our coastal towns and even to one or two of our great cities, where it is still a source of great commercial and economic activity. In many cases, in our country, it is still for many towns and many villages around the coast the only source of economic activity. With all the social implications of providing employment and the satisfactory focus for the community which that implies, I would implore the Government not to let it go.

1.41 p.m.

Mr. Kenneth Lewis: On a point of order. I have listened to the last speech with some interest, although the point of order has nothing to do with that speech. I hope that, although we are discussing white fish, what I am raising will not be thought to be a red herring, because it is not, for us on this side.
The Government are amending the Prices and Incomes Bill with a very large


Amendment. They promised that this would be available in the Vote Office and I have come from my office to get this Amendment. It is not available. I wonder whether you, Mr. Deputy Speaker, can prevail on the Government to make this information available straight away, as they promised. It is largely printed in the Press this morning, but we are not able to see it. We will have to sit on a Standing Committee on Tuesday—I am a member of the Committee—yet this very important Amendment is not available to us to study over the weekend. The Press will obviously have it in advance of us unless it is made available to us now.
I hope that you will be able to use your influence with whoever is concerned to see that this Amendment is available in the Vote Office, as promised, forthwith.

Mr. Deputy Speaker (Mr. Sydney Irving): I can understand the hon. Gentleman's concern, but this is not a point of order. This is a matter for the Government, although I have no doubt that they will have heard what has been said.

1.44 p.m.

Mr. Walter Clegg: I must declare an interest in this matter, because, as a solicitor, I act for companies engaged in the trawling industry. We have had a wide-ranging debate and views have been expressed from both sides which are very similar. The only speaker in the debate who has so far expressed a view different from that generally held was the hon. Member for Kingston-upon-Hull, West (Mr. James Johnson), who took an optimistic view and reproached my hon. Friend the Member for Haltemprice (Mr. Wall) for his view. But if the hon. Member for Kingston-upon-Hull had stayed to listen to the debate he would have heard hon. Member after hon. Member on his own side complain bitterly that the prospect was nothing like so inviting as he made it out to be.
The reason for the hon. Member's optimism is that he represents a port which has many distant water trawlers, for whom the picture is very different from that for other parts of the country. In my constituency is the Port of Fleetwood, which has a middle-water fleet and which is much more like Aberdeen than Hull. The problems of a port with a middle-water fleet are considerable at the moment. The problems of Fleetwood,

in particular, are considerable, because the fish upon which we rely so much—the hake—has been the basis of fishing for many years. I want to try to show the background against which the port of Fleetwood faces the projected cut of 10 per cent. in the operational subsidy.
We accept the ultimate recommendation of the Fleck Report that the fishing industry should become financially viable. However, I would draw the attention of the House to paragraph 124 of the White Fish Authority's Report, which says:
It is certainly highly desirable that the industry should be self-supporting, but this is an objective which does not depend only on the industry's own progress and achievements.
I should like to refer to the particular problems which face the fishing industry in Fleetwood. In the early part of this year, from January onwards, there was a drop in landings. I have the figures here and they are most disturbing. From 1st January to 31st May, the catch fell by 185,000 stones, a reduction of about 10 per cent. In financial terms, the catch was reduced by £153,000, a reduction of nearly 15 per cent. over the corresponding period in the previous year.
But what is even more significant, troni Fleetwood's point of view, is that during that period the hake catch fell by 50 per cent. This is indeed a very serious matter for the port. The hake is a fish used in fish and chip shops in different parts of the country and it is very popular. Fish and chip shops are used to buying this fish, so our merchants in Fleetwood are geared to selling it. If our catch of hake is reduced, the port's difficulties are intensified.
In looking for the reasons for this decline, I must turn immediately to the Western fishing grounds, where most of our middle-water trawlers fish, particularly for hake. There has been a considerable increase there over the past months in fishing by foreign vessels, in particular by Spanish, French and Swedish vessels. These vessels have been pair-fishing, which is a very effective method of catching fish, and the skippers have reported that on those fishing grounds they have seen as many as 12 pair trawlers fishing together.
The result is that the stock of hake on those grounds is rapidly declining, and


our vessels, instead of going to those grounds which are economically the best for them, have to go to Iceland. The difficulty is that the catch which they bring back from Icelandic waters is not so readily disposable on the Fleetwood market. An example recently was a catch of 4,000 kit of Icelandic fish, of which 3,000 were easily absorbed and the other 1,000 did not fetch good prices because of the gearing of the Fleetwood market.
There has been some discussion of the necessity for conservation, with which no one on either side would disagree. Obviously, the Government should be taking steps to arrange the meeting of an international convention, but I appreciate their difficulties in this. At the same time, however, the White Fish Authority says that when we discuss conservation in an international sense, we must have a strong fishing fleet. I am afraid that, unless something is done soon, the possible effect of the subsidy on the port of Fleetwood will be a reduction of its fishing fleet as drastic as that of the Milford Haven fleet, which would be a tragedy.
I turn from that aspect of the Fleetwood problem to some other figures which reflect the difficulty which the Fleetwood industry will have in facing the cut of 10 per cent. That is that there will be a rise in our dock charges this year of £15,000, which the industry will have to pay. Not only that: it will, of course, have to cope with the Selective Employment Tax. It is estimated that, in the first six months, before any money is paid back, the industry in Fleetwood will face a cost of about £52,000, which, for the already heavily capitalised industry, is a great burden to bear.
Because of the position in Fleetwood, would ask the Minister to watch the position of the middle-water trawling fleets very carefully. If steps have to be taken, I hope he will take them as soon as possible, because it is essential that the middle-water ports should be prosperous.
I want to say a word about the crews who sail our trawlers. I have known many of them for years and have the greatest respect and admiration for them. They have a difficult task. The changes

in methods of trawling bring new problems. However, it is only fair to say that a tiny minority of fishermen-1 put it at under 5 per cent.—have by their indiscipline a tremendous effect on the productivity of our fleets and can turn a profit into a loss and thus affect our envisaged goal of viability under the Fleck Report. In Fleetwood, for some reason that I have never been able to discover, we call these men cowboys. Through their indiscipline and preventing boats from going to sea, they do incredible damage.
I agree that, as has been said, perhaps the law is not the best means of dealing with the situation. It may be better done by having more consultation between owners and unions. I agree that some revision is necessary of the Merchant Shipping Act so far as it affects seamen. Nevertheless, I do not believe that in our present situation we can afford "cowboys" in any industry, and they are to be found in general industry as well as in the fishing industry.
I hope that this debate will make the Government aware that the fishing industry and the fishing ports need careful watching.

1.52 p.m.

Mr. J. M. L. Prior: I should like to say how pleased we are to welcome my hon. Friend the Member for North Fylde (Mr. Clegg) to our fisheries debates. I take up at once the point that he made about crews. There is a very worrying situation for all the fishing ports, with the possible exception of Hull, where there is greater comparability between wages earned at sea and those earned on shore than in the other fishing ports.
This summer, as the result of our situation of an over-heated economy and over-full employment, many of the men who would normally go to sea are not doing so. They are staying on shore, where, at any rate in the summer months, they can pick up much more money. In my port of Lowestoft, this is having a very severe effect on the productivity of the fishing fleet. At the moment about one third of the fleet is permanently in harbour because crews cannot be made up. This is one of the effects of the over-full employment from which we are suffering.
This brings out two other points. First, there is an increasing need to attract a


good type of men, and particularly young men, into the industry. We must ensure that conditions are right so that they will come in. We must also make certain that the fishermen who are in the industry are a credit to it so that parents will be willing to allow their sons to come in. If some of the people who have recently been going to sea have given the industry a bad name, they represent a very small proportion indeed of those who go to sea, but they should be stamped on vigorously when they behave in an irresponsible manner, because they give the whole industry a very bad reputation.
We must face the fact that we shall have to pay the men more for going to sea. This raises the problem of who will provide the cash. I believe that the money will have to come from the pockets of the consumers, and I shall develop that argument a little further in a moment.
We welcomed the Under-Secretary of State for Scotland to our fishing debate, but I must tell him, that if he is to speak for the Government on this subject on future occasions, he must make a more detailed and far-reaching opening speech on the fishing industry as a whole. Hon. Members taking part in the debate are put in a very difficult position if they are not given guidance about Government thinking on the many issues that affect the industry, which we can debate only once a year on these Orders. The hon. Member will see from the debates of the past seven or eight years that the opening speech on behalf of the Government has always been a fairly far-reaching one. It is not satisfactory for it to be left to the closing speech for the Government to put forward views on such matters as investment grants, the future of the trawler industry, the minimum price scheme and the many other points raised on both sides of the House. I hope the hon. Gentleman will bear this in mind if he does the job again.
The debate takes place against the background of a very serious economic situation. In a strange way the debate has great relevance to it. Since the war both parties have, broadly speaking, felt in unity about trying to help the fishing industry. On the other hand, both parties have been trying to get away from stop-go policies. The more I look at the way that we conduct our fishing industry

and our agricultural industry, the more certain I am that it would be far better for them if we moved away from a subsidy system, with all the defects that any subsidy system must have for them because a subsidy system is bound by its very nature to upset market forces and produce anomalies arising from its support for the industry.
The hon. Member for Aberdeen, South (Mr. Dewar) spoke about the problems of Aberdeen. I am sure that he will admit that Aberdeen cannot get crews to go to sea. This is one result of over-full employment. The hon. Member also knows that many ships operating out of Aberdeen are not making any money. What the Government have to decide is not whether they should subsidise these ships —it is a very unpleasant decision to make —but whether they should try to keep our near and middle water fleets at their present size. This is the real problem. It is one that I do not like to discuss because I have a considerable near and middle water fleet in my constituency. However, I believe that the country's problems are now so basic and fundamental that it is no good Members of Parliament coming here and making, as we have been inclined to do over the last few years, constituency speeches saying that they know that the economy is in difficulties but they must have additional support for their own areas and special interests.
What we must do—this is why we need constantly to look at the long-term implications of our policy as it affects fishing, agriculture and many other things is to decide whether or not a subsidy in its present form is any longer the right way to help the fishing industry and give the economy the competitive initiative and energy that it must have.

Mr. Dewar: I accept a great deal of what the hon. Gentleman is saying, but would he not agree that, in present circumstances, if we abolished subsidies altogether or rapidly decreased them in areas such as those which he and I represent, it would not be a question of the industry contracting or even of severe contraction, but of virtual obliteration? Is it not obvious, therefore, that if subsidies are to disappear, there must be some other form of statutory support or minimum price scheme to give security to the fleet?

Mr. Prior: I agree. We could not possibly do away with subsidies straight away and I am not suggesting that we should. Just before the hon. Gentleman came into the Chamber I was saying that the whole pricing system should be altered. I regard this as absolutely basic to the fishing industry, and it also applies to the agriculture industry. The White Fish Authority's Report stated that this
… is bound to be greatly influenced by Government's agricultural policy, since massive public support for competing agricultural foodstuffs must make it more difficult to dispense with subsidies for the fishing industry.

Mr. James Johnson: The hon. Gentleman has one distant water boat in Lowestoft. I have 117 in West Hull. Do his comments apply to distant water boats as well as to middle water ones?

Mr. Prior: They apply to distant water vessels much more than to near water vessels because the owners of the former want to stand on their own feet and run their own businesses. As a farmer, I admire the fishing industry for its guts in wanting to stand on its own feet much more than the farming industry desires to do.
The time has come when we should have higher prices for food and no subsidies for either the agricultural or the fishing industries. If we did that we would get competition working in both industries and the nation would get better value because the nation has been mollycoddled for too long by receiving cheap food. As a result, our industries have not become as competitive and efficient—and this applies to manufacturing industry generally as some of our competitors in Europe. A great case could be made out for increasing the price of food, remembering that a dramatic increase would not be necessary. The increase in Purchase Tax announced last week is far larger than the annual increases—if it were done over a period of years—that would be necessary to get rid of these subsidies. This would result in the fishing industry being in a more healthy position, and the same applies to other food industries, including agriculture.
I should like to see the Government working towards a system of no Government support for the fishing industry. If some support needs to be given to cer-

tain outlying areas such as the Western Isles and the Highlands and Islands, we can consider that as a completely separate problem. That is not an economic but a social problem and should be treated as such.

Mr. James Johnson: The hon. Gentleman was the P.P.S. to a former Minister of Agriculture, Fisheries and Food who introduced this ten-year tapering off of subsidies for the fishing industry.

Mr. Prior: I was never a P.P.S. to a Minister of Agriculture, Fisheries and Food. The hon. Gentleman must withdraw that remark.

Mr. Johnson: I believe that he was something even worse; the P.P.S. to a former Prime Minister.

Mr. Prior: I may be the P.P.S. to a future Prime Minister, but I assure the hon. Gentleman that I have never held the position he attributes to me.

Mr. Johnson: I withdraw my remark; I was badly misinformed.

Mr. Prior: Another point which is closely connected with this issue is the fact that imports of fish, particularly from E.F.T.A. countries, are rising rapidly. I am certain that the British fishing industry could make a bigger contribution as an import saver. I remind the Government of the famous, as it was at one time, but infamous, as it is today, speech made by the Leader of the Opposition, as he then was, at Swansea early in 1964, when he talked about the importance of import saving. Here is an industry which could make a considerable contribution to import saving.
I appreciate the difficulties involved in reaching agreement with the E.F.T.A. countries and I understand that those countries, Norway in particular, guard their industries. For example, Norway guards some of its industries extremely carefully, despite E.F.T.A. agreements to reduce tariffs. This is by no means free trade and we should warn Norway quite strongly that we must look after our industry and that that country cannot for ever expect to go on increasing its exports of fish to this country.
I hope that the Government will do something to help the mink industry.
This, too, is closely connected with import saving. The White Fish Authority's Report refers to the growing trade in the export of offal. We could do a lot more to help the mink industry, the activities of which are closely bound up with the by-products of the fishing industry and, in some respects, the agriculture industry, too. Since the war some countries have built up an enormous export trade in mink, particularly Norway, Sweden and Denmark. There is a growing demand in the world for mink coats, although such a demand will probably not exist in Britain in the next few years. If the Government, through the White Fish Authority, gave encouragement to this industry, that would assist our balance of payments.
I regret that the Minister is not in his place, because I would like to know his views about the prospects of the fishing industry if Britain joins the Common Market. My information is that the industry would stand to gain considerably. From the way in which you are looking at the Order Paper, Mr. Speaker, I see that I must be careful to remain in order. My question is concerned with prices, because it might mean that we would get higher prices for fish and be able to dispense with subsidies. Since this is a debate on the future of the fishing industry, we should be told what lead the Government are prepared to give on a matter such as this, which is bound to arise in the coming year.
The decision of the Government to introduce price control was announced in the Press this morning. We are entitled to know how this decision will affect the fishing industry. For example, how can we have control of prices in an industry whose products are sold daily by auction and the supply and demand which affects prices on a daily basis? The Government have clamped down on prices and we should like to know how this restriction is to be worked. For example, how are the agreements with the trawler crews on the question of their share of the catch to be affected by the clamp down on wages in the coming year? One would presume that they are not affected, but it is up to the Government to give an answer to these questions. The crews will certainly want to know, and are entitled to know.
The fishing industry is vital. It is an industry in which everyone in the country feels he has a stake, and for which he has a sense of sympathy. I am concerned to see that the industry prospers in terms of a free economy, and in terms that will allow the rest of the economy to prosper as well. My doubts about the present method of supporting the industry have been growing over the last few years. I want to see steps taken to get us away from stop-go policies and, in a small way, I believe that the present policies we are adopting to the fishing industry at the moment will not help us to get away from the problems that have confronted the nation ever since the war.
Therefore, whilst I support the present scheme and system at the moment, I believe that a great deal of thought needs to be given to whether the scheme is right for the 'seventies, and whether we should not now start to move away from the subsidy system to a system which places the cost of the product fairly on the consumer, and no longer forces the industry to approach the Government each year for a subsidy which they are finding it regrettably harder to get from the Treasury; no matter which Government are in power, the Treasury is always there. I know that my remarks are more of an exploratory nature, but I suggest this is the kind of thinking we should at present be giving to the industry.

2.13 p.m.

Mr. Robert Maclennan: I listened with interest to what the hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie) had to say about the inshore fishing industry in the North of Scotland and, in the main, I agreed with what he had to say. It is true that this industry is vital to the economy of the Highlands. The growth in landings in recent years at the ports in my constituency demonstrates that inshore fishing is an expanding section of the Highland economy.
I hope that when the Government are considering the needs of the industry they will bear in mind the importance of one method of subsidisation that has not been alluded to today—and it is only for that reason that I now intervene—and that is the need to give the fullest support to the harbour authorites to modernise and re-equip the small ports that are handling


such enormous catches of fish, heavy in value and in weight.
My hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh) has pointed out that the available statistics are quite inadequate, but the values of the fish landed in my constituency speak for themselves. In the area of Kinloch bervie, close on £½ million worth of fish was landed last year, while the catch at Lochinver represented a sum not very far short of that. I have had discussions with my hon. Friends about the value of these landings and the importance of modernising the facilities at these ports—

Mr. G. Campbell: I am sure that the hon. Member will also recognise that many of these landings are by boats from the East Coast and the Moray Firth.

Mr. Maclennan: Recognising the hon. Gentleman's constituency point, I make my own constituency point that it is extremely important that we endeavour to enhance the value of these landings for all the Highland constituencies, and to this end I ask the Government to consider what support they can give to the vital and developing fish-processing facilities.
It is a matter of deep concern in my constituency that this enormously valuable quantity of fish has to be taken some hundreds of miles over extremely inadequate roads—on a single-track road for 70 miles. Here, of course, another form of direct subsidy is needed, and I take this opportunity of bringing it to the attention of my hon. Friends on the Treasury Bench.
I am in general agreement with what has been said about the Government's proposals for the statutory minimum price scheme, and would only add that the voluntary price schemes that have operated in past years with some success in Aberdeen and on the Humber have not had quite as much success with the inshore fleets. I therefore urge the Government to encourage the expansion of these voluntary schemes throughout the inshore fleets; and, as they are not prepared at this stage to give Treasury support to the statutory scheme, at least to have an open mind about it, and to continue to review the possibilities.
The White Fish Authority has agreed to proposals to extend the Highland fish-

ing fleet by means of a renewed fishery training scheme. I welcome this news, and await the details with considerable interest. I hope that the Government will not—as I think was the inference to be drawn from some of the remarks made by the hon. Member for Ross and Cromarty—concentrate the development of the fishing fleet on too few ports. If we are to repopulate the remoter areas of the Highlands, expansion of the fishing industry along our coast is vitally important. It is by schemes such as the fishery training scheme outlined that we can hope to do this.

2.19 p.m.

Mr. Anthony Stodart: Without commenting on the content of the speech of the Under-Secretary of State for Scotland, the hon. Member for Greenock (Dr. Dickson Mabon), I wish to extend my personally warm welcome to him on stepping into the agriculture and fisheries sphere. He may remember my saying to him on one occasion that one day he might be embroiling himself with winter keep. He expressed some horror at the prospect, but it seems that he is beginning to move in that direction.
I would say, further, that it is perhaps a little unusual for anyone to be speaking from the Opposition Front Bench when one of his constituents is sitting opposite to him and when his own Member of Parliament is also taking part in the debate.
The hon. Gentleman did not choose a very good sea to sail upon on his first voyage. I do not recall any fishing debate in which opinion has been expressed on both sides of the House so firmly against the Government. The Scottish waters are undoubtedly rough. They must be when the fishing industry in Scotland declined even to meet the Minister of State for Scotland the other day. He invited the industry's representatives and they said that they would not go, although I understand now from the hon. Gentleman that they are to see the Secretary of State. It shows the general muddle within the ranks of the Government.
What has been brought out early in this debate are the very different interests there are within this considerable industry. The hon. Member for Kingstonupon-Hull, West (Mr. James Johnson) spoke very properly about the importance


to the Port of Hull of the distant-water fleet, but that, of course, is of minimal interest to Scotland. This was a point made in a speech with nearly all of which I agreed by the hon. Member for Aberdeen, South (Mr. Dewar). These are interests which do not affect the fishing fleets in the North.
The hon. Member for Berwick and East Lothian (Mr. Mackintosh), has come in just too late to hear my eulogy of him. He delivered the smartest attack on his own Front Bench that I have ever heard in this House. I thought that very healthy; long may it continue.
Of course, there have been substantial cuts in the Scottish fishing industry, even although I understand the hon. Member for Edinburgh, Leith (Mr. Hoy) does not accept this. He refused to accept that premise from my hon. Friend the Member for Banff (Mr. Baker) when he put it to him a week ago at Question Time, but it seems quite untenable if the Joint Parliamentary Secretary tries to say today that there have not been substantial cuts in the Scottish fishing industry. If he refers to the OFFICIAL REPORT, for 20th July, he will find that that is precisely what he did not accept.
It is interesting to look back to February, 1964, when the hon. Gentleman was speaking from this Box and complained of substantial cuts that had been made in the Scottish fishing industry. The reductions at that time were in supplementary subsidies which, as he knows, are provided only in case of special need anyway. If they were reduced then, it is fair to say that they have been eliminated altogether now, because they do not even exist under the present Order.
The basic reductions in 1964 were much less than those made last year and this on the trawler fleet, while the inshore fleet was then entirely unaffected. It is very different today. If the hon. Gentleman was speaking from this Box he would be complaining very loud and very long about what has happened. The trawler fleets have had a larger cut than when the hon. Gentleman made that complaints. I would say en passant to the hon. Member for Aberdeen, South that, when he said that the only significant element in the near and middle-water fleet in Scotland is at Aberdeen, the Granton fleet is not by any means insig-

nificant, although that is the suggestion which one might draw from his remark.
My hon. Friend the Member for Banff and my hon. Friend the Member for Haltemprice (Mr. Wall) have gone into details about the inshore fleet cuts. I shall not say more about them other than that they follow a 10 per cent. cut made on that fleet last year and that was the first cut ever to have been imposed since 1962 on vessels of the inshore fleet. There will be two effects of these cuts.
First, the smaller boats will suffer most. The comparative figures produced by the hon. Member for Berwick and East Lothian about boats operating from Eyemouth for this year and last, were most interesting and most damaging to any case which the Joint Parliamentary Secretary may put in favour of cutting the subsidy for the smaller boats.
It is interesting, in view of a certain Committee on which the hon. Gentleman and I sit upstairs, to see the similarities here to the agricultural policy of the Government. There is talk—I must be careful to quote his hon. Friend rightly—about causing some small units to disappear. One cannot but think that this attack on the smaller units is all part and parcel of present Government policy.
The second effect is that the Scottish industry suffers much worse because as my hon. Friend the Member for Moray and Nairn (Mr. G. Campbell) pointed out. the subsidy for the inshore fleet is being reduced by over 30 per cent. while the subsidy in England and Wales is reduced by only 19 per cent. The Scottish inshore fleet produces 70 per cent. of the British inshore catch and of the total Scottish catch the inshore fleet provides 40 per cent. Therefore, it is of immense importance to the industry north of the Border when anything is done to hurt the interests of inshore fishermen.
This is pretty poor coming from an hon. Gentleman whose particular responsibility this is and who sits for a Scottish constituency. Part of it is caused by the effect of moving from stonage rates to day payments. With my hon. Friend the Member for Moray and Nairn I applaud this change in principle, but I think that it has been a mistake to do this and to cut the daily rates at the same time. It would have been very much better to have made the change over from stonage to daily rates and to have seen the actual


results in the sort of figures the hon. Gentleman has called for and then perhaps to make the reductions in the operating subsidy later.
I agree with the strictures of the hon. Member for Berwick and East Lothian on his hon. Friend for picking out three vessels and claiming that they provide a good reason for this. It had just come to my mind to ask the Under Secretary how typical these vessels were of the industry. He said that three boats were getting £5,000 each.
I remember a classic example many years ago when Mr. Hugh Gaitskell produced, as evidence of the unfairness of the lowering of the Surtax rates, the effect that this would have upon a bachelor with an income of £80,000. Subsequent questions proved that there were no such gentlemen in the country. It seems that there is an analogy here and perhaps the Joint Parliamentary Secretary, when he replies, will be able to tell us whether these three boats are a very fair example.
All this undoubtedly makes the words last year of my hon. Friend the Member for Aberdeen, East (Mr. Wolrige-Gordon) extremely prophetic, because he said that the cuts imposed would make it harder to get crews. Within the last fortnight the Chairman of the Scottish Herring Producers who is also the Chairman of the Scottish Inshore White Fish Producers' Association, has said that the cuts would have a very damaging effect upon the ability of the industry to obtain and keep crews.
This is a social problem for many of the villages in parts of Scotland, particularly, in the North. It is absolutely essential that there should be a healthy inshore fleet there and I very much agree with many of the remarks made by my hon. Friend the Member for Lowestoft (Mr. Prior), on the general approach in the future to the pricing policy of fish.
I would like to deal with herring now. It is fair to remark that the value of the herring catch at first sale was up by 8 per cent. This should be tempered by recalling that the 1964 catch was up by only 1·4 per cent. and the 1963 catch was down by 7·6 per cent. Therefore, the net increase over three years is less than 2 per cent. That adds considerable

weight to the remarks made about the cycle within which this industry evolves.
No one who reads the Herring Industry Board's Report can get a very glowing picture of conditions there. I see that it says:
The summer season was disappointing in almost all respects…. The East Anglian autumn fishing was the worst on record. Of the other autumn fishings, only that of Inverness showed an improvement….
Then there are the remarks of the chairman on finance. The other day he was quoted in the Aberdeen Press and Journal as saying:
Unless we are alive to improving catching techniques, we will be left very far behind by Continentals. The bugbear is finance to meet the high capital cost of gear and the conversion of existing boats for new methods … Government assistance would be needed. The Board would do all that they could do. but progress might not be as fast as they would like.
This is the background to the severe cuts which the Government have chosen to make. There are continual rising costs and there are also interest rates to be considered. It is most interesting to look back at the interest rate figure. In July, 1962, it was 5i per cent., in July, 1963, 5i per cent., July, 1964, 54 per cent. and in July, 1965, 71 per cent. I suppose that today those who are borrowing will have to pay the 81 per cent. or 9 per cent., like most of us who require overdrafts.
In that connection, can the hon. Gentleman tell me whether the rates given in the case of the Outer Isles Fishing Scheme, which I think, deals only with the Western Isles, are more favourable to the fishermen on the West of Scotland than are the rates to, let us say, fishermen in Orkney or Shetland, who I believe, do not qualify under this special Outer Isles Scheme?
Three things stand out. Practically every hon. Gentleman on both sides of the House has referred to the way in which imports of fish are rising. It is true that the percentage of total British landings of white fish crept up by 1.3 per cent, last year.
At the same time, our expenditure on imports rose by four times that amount, by 6 per cent. The £35 million on white fish alone may not be all that much within our total trading account, although the hon. Gentleman the Member for Berwick and East Lothian quoted the figure of all fish imports as £66 million. This


is very symptomatic of the Government's utter arid compete failure to appreciate the contribution which can be made on land and sea in producing more food.
Secondly, there is the National Plan. This is in the melting pot and I hope that the hon. Gentleman will be able to tell us whether there are to be reexaminations of the fishing section of it in the light of what his right hon. Friend said in the House recently about the Plan as a whole. Thirdly, I hope that the hon. Gentleman will answer the question put to him by my hon. Friend the Member for Lowestoft about prices and wages in this not very highly-paid industry. It is, in fact, one of the low-paid industries.
I would like to refer to two other points, the first being research. It is a matter of great encouragement that there are eight pages in this Report on this subject, compared with only two and a half pages in 1964. Research is urgently needed in view of the protein which is supplied by fish. There is a world shortage of protein looming ahead as the population increases.
It was very interesting recently for myself and some of my hon. Friends to pay a visit to the Torry Research Institute and for us to read in this Report about its enthusiasm for the boxing of fish. This is something which has long been done by the fleet working from Granton. We saw some of the work at Torry on super chilling and I wish to pay tribute to the director and his staff who are doing a very good job. One thing that we learned came at the end of the visit when, as we left, we were given a prawn and a little scallop called a queen. They were very delectable, but the queen was even more so than the prawn.
In Scotland, prawns are worth about £1 million out of a total shellfish catch of £1½ million. In 1952, they were not even mentioned in the Report of the Department of Agriculture and Fisheries. Thanks to someone inventing the word "scampi", prawns have now become one of the very fashionable and sought-after dishes of the country. The director of Torry told me that he had been imploring fishermen not to throw these queens back into the sea. So here is another possible growth point in the shell-fishing industry.
I should like the Joint Parliamentary Secretary to say a word on the subject of grants and loans. Is there a change of policy? I ask this question because hitherto the loans have been just about double the amount of the grants. There has been a consistent pattern since 1953, as will be seen from Appendix IV of the Report. That pattern is based on the 25 per cent. grant and the 60 per cent. loan for trawlers and the 30 per cent. grant and 55 per cent. loan for inshore boats. I admit that this is a generalisation to a certain extent, as there are qualifications here. There is for example, a ceiling on grants and there are no loans for larger companies, but I think that it is a fair picture.
I understand—perhaps the hon. Gentleman will confirm this—that the 1965–66 grants and loans to the White Fish Authority are to be equal at £500,000 each and that in 1966–67 grants of £1.1 million will be double the loans which remain at £500,000. I understand that the grants to the inshore sector in 1965–66 are to be £250,000 and in 1966–67 £330,000. So if the former balance were to be kept, the loans to the inshore industry alone ought to be £500,000 and £660,000 respectively, when in fact the £500,000 is to cover loans for the whole of the fishing industry and not just the inshore sector. Perhaps the hon. Gentleman will tell us why there appears to be this complete reversal of previous policy.
I have no doubt the hon. Gentleman will do his best, on a very sticky wicket —if one can fish on a sticky wicket—to try to convince us that these cuts are justified by better results. On this, I would say two things. First, the results in this industry fluctuate more than in any other, and reserves have got to be built up in good years and not snatched away. Secondly, I think that these improved results have got to be considered relatively. An income of £800 or £1,000 a year is not all that much today when one considers the hours worked by the men who go to sea. I have always thought that there are two groups of men in this country who stand out above all others. They are the fishermen and the hill shepherds. On occasions both experience the full fury of the elements, and in the face of them they show unexampled devotion to duty.
I hope that the hon. Gentleman will always bear that in mind when he is


carrying out his responsibilities and presenting these Statutory Instruments to the House.

2.43 p.m.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Hoy): As usual, we have had a very interesting debate. As has been said, it is true that former debates on this subject have not always been quite so political. When we had a Conservative Government we were told that party politics did not divide the House, but it is amazing how the hon. Member for Haltemprice (Mr. Wall) changes when he speaks from the Opposition benches instead of from this side of the House. I shall have a word to say about that later.
I should also like to say a word to the hon. Member for Edinburgh, West (Mr. Stodart) who represents the division in which I live. I am sure that he does not represent my views, but he is my Member of Parliament. I thought he contradicted himself when he tried to indict me for making a protest in 1964. I would remind him that half a dozen sentences later he said that the fishing industry had a poor year in 1963. He was seeking to compare the catches of 1964 and 1965 to show that they were not all that good compared with 1963 when there had been a fall in the catch. Because of that I thought the Government of the day had no right to impose a cut on top of that. That is all that I was saying—

Mr. Stodart: The supplementary subsidy cuts against which he was protesting had to do with white fish, whereas the cuts to which I was referring related to herring.

Mr. Hoy: I thought the hon. Gentleman was referring to both. If he was not, I could not understand the point of his argument. It was also interesting to hear his tremendous tribute to boxing when he said that this had been carried on at Granton and Newhaven for a long time. I remember saying this many years ago. My problem was that I could not convince the hon. Gentleman's Government that they ought to make allowance for this fact. I do not need any conversion in this respect.
I now want to deal with one or two other figures. I enjoyed the speech of my hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh). He is a great statistician—far superior to me, of course. I was rather interested in the statistics which he gave. Indeed, the figures that he used were supplied by myself in reply to a Written Question that he put down. He said "This is a tremendous thing—£60 million of fish imports"

Mr. Mackintosh: The figure was £66 million.

Mr. Hoy: What my hon. Friend failed to tell the House was that £40 million of that was represented by tinned and processed fish—salmon and so on. He cannot be so selective. If he wants to make a comparison, let him compare like with like. He went on unfairly to accuse my hon. Friend the Under-Secretary of State for Scotland of having referred to three examples of boats which were receiving £5,000 a year in subsidies. My hon. Friend the Under-Secretary did not say this was general. He said "This is what is happening "and then he said" If I may instance these three boats." He used the word "instance". He did not say that this happened as a general rule.
If my hon. Friend the Member for Berwick and East Lothian is interested in the figures, let me quote the average subsidy earned in 1965. Stonage vessels between 40 ft. and 60 ft. got £1,925, while the 60 ft. to 65 ft. vessels got £1,336. Despite the tremendous costs involved, the subsidy earnings for the bigger boats were less by half those on the stonage rates. I thought my hon. Friend would be interested to have those figures. He was a little selective. When I was a member of the Public Accounts Committee, I always had a great fear of, and lack of faith in, certain experts and statisticians. My hon. Friend says that in the first six months of this year earnings were down by a specific sum. That might well be true, but this is not representative of the country as a whole, because while the catch in Scotland is down in the first six months of the year, earnings in the United Kingdom are up by 3 per cent.
I am not seeking to say that cuts are not being imposed. What has interested me is the number of hon. Members in this House who have said that the one


thing the Government ought to do is to change the whole system of subsidies. The hon. Member for Moray and Nairn (Mr. G. Campbell) said this, as did the hon. M ember for Edinburgh, West and the hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon). They said that the old system was wrong and that we ought to get it on to a daily basis.

Mr. G. Campbell: Mr. G. Campbell rose—

Mr. Hoy: I should like to finish what I am saying without any interruptions. The hon. Gentleman said: "The system you have introduced is a much better one, but on this occasion you have also imposed cuts which are too large." That is the argument. All I say in reply is that he must compare these earnings and then think of what the other people were complaining about—the larger owner who said that he was finding it more difficult to man his boats because of the attractive earnings of the people on the stonage subsidy.

Mr. G. Campbell: I know that the hon. Gentleman would not wish to misrepresent what I said. I was saying that, because of the anomalies which had begun to arise, one of the systems should be adopted. I was not necessarily saying that it should be the daily rate system, as the hon. Gentleman suggested, but that it was for the Government to decide on one or the other; and this is what fishermen wanted.

Mr. Hoy: If the hon. Gentleman was not prepared to specify, his hon. Friends were more specific and said that this was the right system to adopt. He will at least admit that changes had to be made if we were even to appear to be acting fairly between one section of the industry and another.
Some of the points raised have been rather wide of the proposals before us, but I am certain that you will allow me to reply to them, Mr. Speaker. Many of them concern local points and I shall try to deal with them to the best of my ability as I go along.
The proposed reduction of 10 per cent. in the basic subsidy is strictly in accordance with the 1962 Act and our arrangements with their industry. It is also reasonable in the light of the upward trend of landings and earnings, and there is no use hon. Members opposite saying, "You imposed a high cut last year".
The hon. Gentleman knows that when he and his Government made this Agreement, they said that the subsidies would be wiped out over a period of 10 years and that the subsidy cut would vary between 7½ per cent. and 12½ per cent.; indeed, it had to be done over these 10 equal periods. When hon. Members opposite reduced the cut to 7½ per cent., they knew perfectly well that eventually somebody else, to compensate for these two years, would have to put the subsidy cut up to 12½ per cent. This was the agreement, so that over the 10 years the subsidy had to be removed in more or less equal stages.

Mr. Wall: I am grateful to the hon. Gentleman for giving way. I do not know what he is getting so excited about. No hon. Member on this side of the House, so far as I remember, ever queried the 10 per cent. cut for normal trawling vessels. We have been complaining about the much greater cuts for inshore vessels, especially in Scotland.

Mr. Hoy: I do not know why the hon. Gentleman wants to interrupt. He was not here when this point was raised. We were accused of having, last year or the year before, imposed a 10 per cent. cut. That is all that I was referring to. I am not complaining that the hon. Gentleman was not here, but he has no right to interrupt when I am replying to a point which was raised in his absence.
We have very carefully considered the results of the fleet in the last six winter months. In addition to the one case mentioned we had two others, a claim from Aberdeen and a claim from Milford Haven, that they should get some special assistance. But the crucial test was whether costs were high or were of any peculiar effect in Aberdeen or Milford Haven, and whether there were circumstances outside their control. I am sorry to say that we could not, even by stretching the matter to its very widest, have paid the special grant to either of these areas.
I now turn to the subsidy proposals regarding inshore vessels and the herring fleet, which are for reduced rates. The value of subsidies to the inshore fleet in 1965–66 was higher than in 1963–64, despite the 10 per cent. reduction in rates last August. My hon. Friend the Member for Berwick and East Lothian wanted to


know something about earnings. In 1965 the profits increased from £3.5 million to £4·2 million. The reductions in rates this year will vary between 10 per cent. and 15 per cent. of last year's rates.
I agree that in certain cases they are higher. I have never sought to hide that fact. In absolute terms, they are slightly larger than last year and they are in line with the reductions for the deep sea fleet, which did not share in the increase in profits. The reduction is in accordance with the policy laid down by the previous Administration, and is well covered by the increase in profits.
There has been a good deal of comment on the change-over from stonage to daily rates for most vessels between 35 and 60 ft. in length. I do not think that anyone will deny that in recent years it has become steadily more obvious that vessels on stonage rates can earn subsidies far exceeding those payable to the larger and more costly vessels on daily rates. I must say that to the hon. Member for Moray and Nairn, who said that he had been trying to convey that to the House for a long time so that changes could be made.
The largest subsidies have been going to those who needed them least and the daily rate vessels have had difficulty in competing for crews. I do not think that anyone who knows anything about the fishing industry could seek to deny that. The fishermen have rightly said that it is only fair to pay both classes on the same basis, and the boats going on to daily rate will be no worse off than those which already get daily rates. We feel that this is fairly simple justice. I do not deny that it means a cut in their subsidy earnings, but that is only to bring them back into line. I agree that some vessels will take large cuts, but they are precisely those which have been getting the largest subsidies.

Mr. Mackintosh: The most efficient.

Mr. Hoy: I beg my hon. Friend not to believe that, because one gets a very large subsidy, one is efficient. That does not always work out, even on stonage. Of course not, because all that one has to bring in is stonage. Quality has a lot to do with the fishing industry.
The overall effect will be a reduction of 25 per cent. on the level of subsidies

three years ago, which is what the vessels on daily rates have had. Moreover, daily rates will afford greater stability when fishing is poor.
There has been the opposite criticism that we should be putting more vessels on to daily rates. We have said—I say this in reply to the hon. Member for Moray and Nairn—that vessels which earn less than £500 in subsidy last year should remain on stonage rates. For these vessels, daily rates would have had an opposite effect. If we put them on to daily rates, the subsidy would increase, and this is the very thing we are trying to avoid.
There are many vessels which have been fishing only occasionally. We must pay them for what they catch and not just for going to sea. I recognise that there are also some vessels—particularly in the South-West—which have been fishing regularly, but for quality rather than quantity. They will not qualify for daily rates. They will be no worse off by remaining on stonage rates, but I give the assurance that we shall consider whether they can be helped next year. I shall certainly look at it.
These proposals have been discussed with the fishermen's organisations. My hon. Friend the Member for Berwick and East Lothian said that he would like more statistics. He might be interested to know that the reductions in subsidy amount to £530,000, and this will be taken out of increased profits of £700,000. This is where the money will come from. The new arrangements are fully in accordance with the policy which has been supported by both sides of the House since 1961.
We have had a little difference about how far we should go in the debate, but I should like to say a word about assistance for investment. Having given an assurance that I shall not depart too far from the business before the House, may I be allowed to refer briefly to the assistance available for modernising the fleet, this being bound up with the reduced need for fishing subsidies?
It remains our policy to promote the economic development of the industry and to maintain the catching capacity of the fleet. Continuing modernisation is an essential element in this policy. On 9th March, my right hon. Friend announced our intention to make a new


scheme of grants for fishing vessels following the passage of the Industrial Development Bill. The rates of grant will be 35 per cent. for vessels of 80 feet and over in length and 40 per cent. for vessels under 80 feet in length. They will apply not only to new vessels but also to improvements on a basis which is to be discussed with the industry. Meanwhile, grants continue to be available under the existing schemes and will be supplemented to bring them up to the new rates when the new scheme is approved. The new rates will in due course be payable on the full eligible cost of the investment, and the ceilings on total expenditure and on individual grants will be removed.
The arrangements for prior approval by the White Fish Authority and the scrapping ratios will be retained for the present This is a substantial improvement for the industry, and I am sure that the hon. Member for Haltemprice will agree that we sometimes have to protect the industry against itself in the keeping of old boats in action.
Where investment has taken place, since the publication of the White Paper on 17th January, which was not approved but would have been approved if the new arrangements had applied from that date, consideration will be given to the retrospective payment of grant. I hope that this will find an encouraging reception in the industry.
The hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie)—I call him my hon. Friend—raised several points and dealt specifically with the pilchard fishing industry which is of particular concern to his hon. Friend the Member for Bodmin (Mr. Bessell). I do not blame fishermen for getting the best deal they can, and neither do I complain too much if they sometimes get a little more than one thought they ought to have, but I must say to the hon. Member for Bodmin that in the season his fishermen could pick up and have been picking up subsidy at the rate of Is. 1½d. for every 3s. worth of fish. Somebody had to do something about it. There is not a right hon. or hon. Member who would say that he would not have taken action.

Mr. Peter Bessell: Has the hon. Gentleman taken into account that the fishermen who rely on pilchard can fish only for limited periods each year and this affects their income considerably?

Mr. Hoy: I well understand that, but the hon. Gentleman will understand, for his part, that one could not fix subsidies to provide them with an income for 12 months because they were fishing for three months. All I am saying is that we have got to face the figures. We found that, even during that fishing period, a pilchard vessel was earning £60 a week in subsidy, and these are just hard facts.
I am a little surprised sometimes when hon. Gentlemen say, "Let us have more money for it". It is taxpayers' money. I have said this frequently before, not only from this Box, but from that one, and upstairs in the Committee on Public Accounts. I have argued it times without number. Indeed, we had a better proposition put from the hon. Gentleman the Member for Lowestoft (Mr. Prior). He said we ought to be getting rid of subsidies and let the price of food go up. Whether one agrees or disagrees, he was saying that this is an artificial system altogether. He was not arguing for more subsidy; he was saying that the logic of the whole thing is that we should get rid of subsidies altogether and let the price of food be increased accordingly. All I am saying is that hon. Gentlemen cannot have it both ways.
We gave very considerable thought to the question of the pilchard fishermen, but those figures made it very difficult for us to do very much more about it.
As to grants for fishing vessels, despite all that has been said I think it may be interesting if I tell the House just what has been happening, for I am sure the House would like to know. Always it has been said that we have been very niggardly in the provision for inshore vessels. It is true that in 1965–66, the Authority had to reject or defer some applications for shortage of funds, but this was because there was an unprecedented demand for grants, as I hope the figures will prove. The value of approvals given for inshore vessels in 1965–66 was the highest for four years.
In 1962–63 the figure was £115,000; in 1963–64 it fell back to its lowest, £96,000; in 1964–65 it went up to


£164,000, and in 1965–66 it reached £198,000, the highest it had been in the past four years. I am not saying that this was just terribly generous, or that we were being over-generous; all I am saying is that this does not bear out some of the critcisms which were being levied about it.
The hon. Gentleman raised the question of berried lobsters on a number of occasions. This was raised also

Mr. Stodart: Before he leaves the other subject, would the hon. Gentleman say anything about loans to the inshore section?

Mr. Hoy: I should deal with loans. All I can say is that, as the grant ceiling has been removed, obviously that is going to make the industry less dependent on loans. That is why £500,000 was put in, which ought, in view of that, to go very much further.
Now if I may come to the query about berried lobsters—and so frequently the hon. Gentleman raises questions if not about berried lobsters, then about skin divers, or something or somebody else. In reply to him and the hon. Gentleman for Aberdeenshire, East, we have removed the national prohibition on the landing of berried lobsters because the scientific evidence is that the prohibition tended to reduce the catches but without corresponding benefit to the stocks. Despite what has been said by the hon. Gentleman about what is happening overseas, our scientific advisers give us this advice, that it is not a satisfactory conservation measure, and it is difficult to enforce. This decision was supported by the sea fisheries Committees round most of our coast. The sea fisheries Committees on the North-East Coast think differently from those in all the other areas.
The Northumberland Committee still has a local prohibition and it is open to others to propose similar prohibitions in The light of local circumstances. What we could not do was to maintain a national prohibition for which there was no national case. That would have made a nonsense of the whole thing. The whole problem was discussed very exhaustively with all the interests concerned so that the decision was not taken lightly.
The hon. Member for Aberdeenshire, East raised a specific point about the English herring fleet and seemed to think that it is getting rather more than the Scottish herring fleet. It is true that the English rate is relatively high, at 10 guineas, compared with the £5 13s. for vessels under 80 ft. But it is equally true that the English boats are disappearing very fast from herring fishery because they are bearing such heavy losses, which, of course, is why they get that much more. They are disappearing and they will not in any way compete in herring.
The hon. Gentleman also asked about the two experimental boats. One is Scottish and the other English, which is fair. But it would not matter to me which was doing the job if it made a valuable contribution to the industry as a whole.
In dealing with the question of minimum prices, the hon. Member for Haltemprice said that the last Government concluded, in July, 1964, that the White Fish Authority should consider a minimum prices scheme.

Mr. Wall: I said that in July, 1964, the Authority was authorised by the then Minister to start discussions with the industry on a statutory scheme, including a Treasury grant.

Mr. Hoy: That is no different from what I am saying, which was that discussions started. The hon. Gentleman complains that, having asked the Authority to consider the matter, we had a General Election in October, 1964, and that the Labour Government did not introduce a scheme for minimum prices at the beginning of 1965. That is surely going a little too far.
The hon. Gentleman knows as well a, I do—and I cannot understand why he interrupted when I said this to him—that we cannot discuss the court case. Yet he asks me what, if the Restrictive Practices Court brought in a certain verdict. the Government would do. I said that I would not discuss it because the case is, I believe, expected to be completed this week or next week and is therefore sub judice. It is not for me to discuss it or to comment. I do not know what would have happened if I had said to the Court, in effect, "Whatever you do, Parliament will do something different". The Court would have taken a dim view


of that. It was a dangerous question for the hon. Gentleman to put.

Mr. Wall: What I really was saying was that if, during the first 17 months of the Government's life, they had decided to introduce a statutory scheme, all this would not have happened.

Mr. Hoy: The hon. Gentleman is quite wrong. What he was saying earlier was that we had done nothing except set discussions going, and he asked why we did not bring in a scheme in 1965. There is no ambiguity. We have agreed —the first Government ever to do so—to a minimum prices scheme in principle. No other Government have said it. On that basis, the Authority is now discussing it with the industry. When it is put up, all our problems will have to be discussed—finance and everything else. All that I am saying is that I cannot make any promises today.
The White Fish Authority is dealing with this matter. It has to get the agreement of the industry, and I hope that the talks will be successful. I know how important this can be to the industry, but not the whole of the industry agrees with this. The hon. Gentleman knows that one large firm does not give the scheme very much approval, so what we have to do is to get an agreement which will be at least reasonably satisfactory to the industry as a whole.
I am grateful to all hon. Members who have taken part in the debate. I am certain, as I have said on many occasions, that we all want to see this industry play a substantial part in the economic wellbeing of our country. It plays an important part in the local economy of many areas of England, Scotland and Wales. As the hon. Gentleman said, I know most of these places, such as Fleetwood, Lowestoft, and so on, and I know how important this industry is to the areas in which it exists.
I assure the hon. Gentleman that the Government will do their best to help, by way of such things as the grants which I have announced, to build up a secure industry. The day envisaged by the hon. Member for Lowestoft may well come, and perhaps if the fishing industry does this, the agricultural industry might try to emulate it, and that will be an even more wonderful day.

3.17 p.m.

Mr. Kenneth Lewis: Mr. Kenneth Lewis (Rutland and Stamford) rose—

Mr. Speaker: Does the hon. Gentleman wish to speak?

Mr. Lewis: Yes, Mr. Speaker.

Mr. Speaker: The hon. Member has not been present during the debate.

Mr. Lewis: I am sorry, but I have been in and out of the Chamber during the debate. The only reason why I wish to speak is that I raised a point of order earlier in the day, about two hours ago.

Mr. Hoy: If the hon. Gentleman is talking about a point of order, it has nothing to do with the debate.

Mr. Lewis: If the hon. Gentleman will wait, he will hear what I have to say.
I raised a point of order, and I was told that I was fishing in the wrong waters. I accepted the Ruling that the point that I had raised had nothing to do with the Chair. My only recourse, therefore, is to come into this debate.
The hon. Gentleman mentioned minimum prices for fish, and I think that I am in order in talking on the point, which I shall do as briefly as possible. At the moment we have going through the House the Prices and Incomes Bill, which will affect the price of fish. The Government have promised to make available to the House proposed Amendments to that Bill.

Mr. Speaker: Order. The hon. Member is completely out of order now. He must speak to the Motion which is before the House.

Mr. Lewis: The connection between these Amendments and the discussion this afternoon—

Mr. Speaker: Order. The hon. Member must accept what the Chair says. He is out of order if he discusses the Prices and Incomes Bill, and Amendments and proposed Amendments to it.

Mr. Lewis: If I might do so on a point of order, I must try to make it clear to the Front Bench opposite that we have been promised we have a Cabinet Minister present, and he can pass the word on—that Amendments to the Prices and Incomes Bill would he made available to the House. They are not available—

Mr. Speaker: Order. The hon. Member must resume his seat.

Question put and agreed to.

Resolved,

That the White Fish and Herring Subsidies (United Kingdom) Scheme, 1966, a copy of which was laid before this House on 12th July, be approved.

White Fish and Herring Subsidies (Aggregate Amount of Grants) Order, 1966 [copy laid before the House on 4th July], approved.—[Mr. Peart.]

POLICE PENSIONS

3.20 p.m.

The Under-Secretary of State for the Home Department (Mr. Dick Taverne): I beg to move,
That the Police Pensions (Amendment) (No. 2) Regulations 1966, a draft of which was laid before this House on 7th July, be approved.
These Regulations amend the Police Pensions Regulations, 1962. Regulation 1 of the draft Regulations concerns the pensions of police officers who are retired following injury on duty. As hon. Members probably know, these pensions consist of two elements—a basic pension and a supplementary pension. At present, the Pensions Regulations provide that for the purpose of assessing a supplemental pension account shall be taken of any flat rate National Insurance sickness or injury benefit which the pensioner is receiving in respect of his injury.
The National Insurance Act of this year provides that from 6th October earnings-related supplements will be payable in addition to flat-rate sickness or injury benefits for an initial period of 26 weeks. Regulation 1 accordingly provides that where account is taken of flat-rate National Insurance sickness or injury benefit account shall similarly be taken of the supplementary benefit received under the 1966 Act in respect of the injury.
I should add that in practice this is not likely to cause any further abatement of pension. This is because the new earnings-related supplements are payable only for the first 26 weeks whereas police officers injured on duty are normally not retired until a considerable time has elapsed since the injury, and this is normally more than six months.
Regulations 2, 3 and 4 of the draft Regulations concern discretionary increases in certain police widows pensions. The police were excluded from the contributory old-age pension scheme which existed before 1948 and some officers were, therefore, unable to establish any entitlement to a State pension for their widows. Since 1948, the police pensions scheme has given police authorities discretion to make payments to such widows of the same amounts as are available under the National Insurance Scheme.
Over the first 13 weeks of widowhood these payments are equal to the higher rate of National Insurance widows' benefit, namely, £5 12s. 6d. a week—which is known as the widows' allowance—and thereafter at the normal rate of benefit of £4 a week.
The Act of 1966 provides that from 5th October widow's allowance shall be payable for the first 26 weeks instead of the first 13 weeks of widowhood, and this extended benefit period also applies to women whose husbands die within the 13 weeks before 5th October, and who will therefore still be in receipt of widow's allowance when the provisions of the Act come into operation.
The amendments referred to in Regulations 2, 3 and 4 of these draft Regulations similarly extend the period during which the payments to police widows, corresponding to the widow's allowance, may be made. The Police Council for Great Britain has been consulted and is in agreement with the proposal that these amendments should be made.
There is one further point. These Regulations are fearfully difficult to follow, with all their cross-references. This is the eighth amendment of the 1962 Regulations. The House will be glad to know that consolidation of the Police Pensions Regulations is now at an advanced stage and that the consolidated Regulations will be presented in the autumn. Meanwhile, because the provisions of the National Insurance Act, 1966, which need to be taken into account, come into operation on 5th October this year, the House is being asked to approve the draft amendment Regulations.

3.24 p.m.

Mr. Richard Sharpies: I am sure of one thing—that


the House will be grateful for the last remark made by the Under-Secretary. On previous occasions I have drawn attention to the complexity of these Regulations, and I am delighted that we are at last to have consolidated Regulations which will be of assistance to all those who have to deal with these Regulations.
I am grateful for the Under-Secretary's explanation. Regulations 2, 3 and 4 are beneficial and are, therefore, to be welcomed. Regulation 1, I think, is to prevent a policeman retired on injury pension receiving more than a prescribed amount. This, as was indicated by the Under-Secretary, is in accordance with the principle of abatement which has existed ever since the 1948 Act came into force.
However, under the 1966 National Insurance Act, a policeman is called upon to make an additional contribution of approximately 2s. Over the police force as a w1-ole, this amounts to £450,000, if my figures are correct. From this sum, contributed compulsorily by individual policemen, they will receive no benefit. I think that the hon. Gentleman was somewhat less than frank with the House, because he should have said that these Regulations—and No. 1, in particular—were accepted by the Police Federation in the Police Council only with considerable reluctance and a number of reservations.
The reservations were that they expected that there should be improvements, first, in sickness benefit, second, in supplementary pensions, third, in a number of provisions relating to widows' pensions, and, fourth, in the provisions relating to children's allowances. Before the House passes these Regulations, we should be told whether or not the Home Office accepts in principle the reservations put forward as a condition for the acceptance of Regulation No. 1.
The House should also be told what happens to the £450,000 contributed by the policemen, from which the police receive little or no benefit. Who gets the benefit of this amount contributed

under the 1966 Act? I do not wish to hold up these Regulations, but we do need an explanation of these two points.

3.27 p.m.

Mr. Taverne: I can give a very short answer to these two questions. First, the increased contributions which will be made by individual police officers will ensure for them a small graduated retirement pension, which will not result in a reduction of their police pensions, so they will get some small benefits from it.
We are aware that the Police Federation accepted these Regulations with some reservations, and that they have put forward certain proposals. I can assure the hon. Gentleman—I am sure that he would not expect me to go further than this—that this will be taken carefully into account and considered by the Police Council in due course.

Mr. Sharples: Will the hon. Gentleman answer my other point about the £450,000?

Mr. Taverne: This is very much related to the first point, as it is closely connected with the benefits which are received and any other proposal to be considered by the Police Council.

Question put and agreed to.

Resolved,

That the Police Pensions (Amendment) (No. 2) Regulations 1966, a draft of which was laid before this House on 7th July, be approved.

DOUBLE TAXATION (AGREEMENT WITH FINLAND)

Resolved,

That an humble Address be presented to Her Majesty, praying that, on the ratification by the Government of Finland of the Protocol set out in the Schedule to the Order entitled the Double Taxation Relief (Taxes on Income) (Finland) Order 1966, a draft of which was laid before this House on 7th July, an Order may be made in the form of that draft.—[Mr. MacDermot.]

To be presented by Privy Councillors or Members of Her Majesty's Household.

DOUBLE TAXATION (AGREEMENT WITH NEW ZEALAND)

Motion made, and Question proposed,

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (New Zealand) Order 1966 be made in the form of the draft laid before this House on 13th July.—[Mr. MacDermot.]

3.30 p.m.

Mr. Patrick Jenkin: I think it right to say a few words on the second of the principal renegotiated agreements made following the introduction of the tax changes in the Finance Bill last year.
When we discussed the American Convention, just over a month ago, I was very critical of the agreement that had been reached on the ground that it was to the disadvantage of both the United Kingdom Revenue and United Kingdom investors. It appears, as was almost inevitable, that the New Zealand Order has the same effect.
Dividends from a New Zealand company remitted to a United Kingdom shareholder will suffer tax at the rate of 9s. 6d. in the £ in New Zealand, or 47–1, per cent., plus a 15 per cent. withholding tax, a total of 621 per cent. If one looks at it the other way round, dividends arising from a company in the United Kingdom and being paid to a New Zealand shareholder will pay 40 per cent. Corporation Tax plus a 15 per cent. withholding tax, a total of 55 per cent., which is substantially less than the revenue that will be gained by the New Zealand Inland Revenue in the converse situation.
This appears to arise inevitably, as did the American one, from the pattern of Corporation Tax introduced by the Government last year. In the case of New Zealand, I imagine that the loss to our balance of payments will be very marginal compared with the American situation, where it amounted to about £10 million, the figure given by the Financial Secretary on that occasion. But when this is added up over the 60 or 70 agreements that will have to be renegotiated and that will find themselves in these terms, one must recognise that one of the byproducts of the change to Corporation Tax last year in the form in which the

Government introduced it, as one article said in relation to the American one, as that it is as if we were taking gold bars from the Bank of England and shipping them overseas and putting them in the deposits of overseas countries.
I want to raise one or two minor points on the Order. Article XIX(2) provides that a company in New Zealand may be subject to an extra 5 per cent. tax. This is, in form, reciprocal, but it is, I understand, to comply with the existing pattern of New Zealand legislation. I should be grateful for an assurance that there is no suggestion that the United Kingdom Revenue will apply a comparable procedure for New Zealand companies trading in this country. Similarly, is the 10 per cent. withholding tax on royalties one which will be applied by the United Kingdom Revenue to royalties arising in this country payable to a New Zealand owner?
In other words, will the United Kingdom Revenue introduce a provision to deduct a 10 per cent. tax on the royalities paid overseas? There appears to be power to introduce such a provision under the general regulations, but since this would be something new we should be told the Revenue's intention in this matter.
There are several points about the drafting of the Order which concern me. Some rather odd phrases are used, one of which appears in Article VI (5,a), which picks up items deemed to be a distributions. These items were contained in paragraph 1(1,c) of Schedule 11 of the Finance Act, 1965 dealing with
… redeemable share capital or security issued by the company otherwise than wholly for a new consideration …
The Financial Secretary will recall that that part of Schedule 11 is in the course of being amended by this year's Finance Bill to clarify its meaning. However, the Amendment has not been incorporated in Article VI of the Convention. Can we have an assurance that the Convention will be interpreted as though this 1966 Amendment had been made? It has been made clear that the Amendment has been introduced into this year's Finance Bill to clarify and not to change the actual meaning of the provision. Presumably the Convention can be interpreted by the taxation authorities


on both sides as though that Amendment had been made. I trust that the hon. and learned Gentleman will clarify the position. Would he also say why it is thought that this one exception should be made in connection with what are distributions under the terms of Schedule 11? It seems an odd exception to make since there seems no reason why it and no others should have been made.
Another drafting point occurs in relation to Article XIX (2), in which we read this peculiar phrase:
The taxation on a permanent establishment …
Article II gives the definition of the phrase "permanent establishment" as especially including
… a place of management … a branch … an office … a factory … a workshop …
It therefore seems odd to talk about taxation on "a permanent establishment". The natural meaning of the phrase would be in respect of a property tax, rates, and so on, as being a tax on an establishment. However, from reading the rest of Article XIX (2) it appears that that is not the intention, but that the paragraph is getting at profits arising from the activities carried on at a permanent establishment. If that is what it means, the word "on" would seem an odd way of summing up the matter.
The Financial Secretary will recall that on 24th June last, when discussing the American Convention, he told the House that arrangements were under discussion between the Inland Revenue and various interested bodies, and he said that it would be workable and would not impose any burdens on companies—the point being that companies will have, in respect of dividends paid to overseas residents, to deduct tax not at the standard rate of Income Tax, but at a 15 per cent. withholding tax. I understand that those discussions are confined to the American position, where the amount of dividends is vastly larger than those payable to any other country—in fact, to the rest of the world combined.
Exactly the same situation will arise in relation to dividends paid to residents in other territories, and unless satisfactory arrangements are worked out, companies will find themselves faced with difficult administrative problems of deciding what rate as there may be different

rates—of withholding tax should be deducted from dividends paid overseas, and that will depend on the residence of the overseas shareholder. Arrangements for this purpose should be worked out, so far as they can be, by the Revenue authorities here with the interested parties to cover not only the American situation, but these other countries as well.
I would add that if it is the intention under Article VII of this Order to deduct the 10 per cent. tax from royalties paid in this country to a New Zealand resident exactly the same consideration will apply in those cases. Someone will have to give a certificate to the United Kingdom Government authorising them to deduct only the 10 per cent. tax and not the other way, and also indicating that it should be deducted and the royalty not paid gross. I hope that the Financial Secretary will be able to deal with these rather detailed points.
For the rest, the Order appears to reflect very closely the model Order drawn up under the auspices of the O.E.C.D. which is trying to bring a wider measure of standardisation into this difficult branch of fiscal law. To that extent, the Order may represent in this consideration an improvement on the one before, and if the hon. and learned Gentleman can answer one or two of my queries I see no reason why we should not allow the Order to go through.

3.41 p.m.

Mr. Graham Page: When is it intended to bring the Order into operation, and how is the public to be informed that it is coming into operation? This is one of the problems that frequently arise on double taxation Orders because they depend on the coming into operation of the agreement on which they are based, but it rises in a peculiar way in connection with this Order.

Article XXIII states:
This Agreement shall come into force on the date when the last of all such things shall have been done in the United Kingdom and New Zealand as are necessary to give the Agreement the force of law in the United Kingdom and New Zealand respectively …

This date cannot possibly be known to the normal citizen in this country, and he will have to be informed of it in some way. The Order contains no


indication of when it is to come into operation or how the date is to be notified to the public.

In fact, the Explanatory Note is more confusing than explanatory. Its very last paragraph states:
The Agreement is to take effect in the United Kingdom for corporation tax and capital gains tax for all years and for income tax, profits tax and surtax from the dates on which the previous Agreement ceased to have effect.

That paragraph does not seem to cover other matters included in the Order.

I suppose that the Order will have a note at the top saying that it will come into operation on such-and-such a date, or perhaps the Financial Secretary will tell us that the date will be announced in the London Gazette. Nevertheless, when dealing with this draft Order we should know when it is to come into operation and how the public is to be informed of that date.

3.43 p.m.

The Financial Secretary to the Treasury (Mr. Niall MacDermot): The answer to the last question put by the hon. Member for Crosby (Mr. Graham Page) is that the Order comes into operation when Her Majesty makes the Order in Council. The New Zealanders have already completed all their formalities, so that it only remains for us to complete the final stage. When the Order has been made in Council it is published as a Statutory Instrument, and that gives the date and that is when it comes into effect.
The hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) raised again a number of rather wider questions which we discussed at some length when we debated the United States Order. I will not seek to repeat the replies I gave to his general argument, other than pointing out that there are offsetting factors here, including the factor that we welcome inward investment into this country, and the low rate of our Corporation Tax may be an inducement to inward investment. As I said, do not propose to go into those matters in detail.
I am glad that I have this opportunity of saying how much we welcome the conclusion of this agreement. The negotiations were the result of a notice given by the New Zealanders because they have introduced a big change in their

tax system, just as we have done, by which they also have separated company from personal taxation. So, as it were, they have anticipated the request which we would have to make otherwise as a result of our tax changes. As in the case of all agreements of this kind, there has been give-and-take on both sides.
Turning to the specific questions which the hon. Member asked, first in relation to Article 19, I certainly give the assurance for which he asked. We have no intention of applying a comparable tax to the 5 per cent. tax which the New Zealanders have and which, as the hon. Member rightly said, is referred to in this article, although in form it is made to apply both ways.
The next question he asked was about the 10 per cent. withholding tax on royalties and if this was to be applied to royalties going to a New Zealand resident. The answer is that such royalties will suffer tax here in the first instance at the standard rate and then relief down to the 10 per cent. rate will normally be given by repayment. That is the procedure by which it will be done.
The hon. Member asked questions on Article 6. The first is why this exception to be included in paragraph 5(a) excludes in effect one of the definitions of distribution in the Schedule to last year's Finance Act from dividends here. The answer is that redeemable share capital issued other than for value is excluded from the definition because no tax is deducted on the issue of such a share. Therefore, it was thought inappropriate to give a non-resident a tax refund in relation to his share capital.
The hon. Member asked what would be the effect on this of the Amendment we introduced this year into the Schedule in our Finance Bill by adding the word "any" before "security". The hon. Member contends, and I do not dispute, that the purpose of that Amendment was primarily clarifying and was not intended to alter the sense. Of course, when it passes into law it is a matter for the courts ultimately to construe whether it does, in fact, alter the sense or whether it is merely declaratory and clarifying.
If it is merely declaratory and clarifying it cannot make any alteration. If it makes any alteration in the context we are considering here, the alteration would


operate here to the disfavour of the taxpayer because the taxpayer would be seeking to establish that it was a dividend within the definition because he would then benefit. Therefore, the wider the exception the greater risk he will suffer. All I can say is that if such issues were raised we would not seek to construe this in any way to the disadvantage of the taxpayer. I think that that is probably the most satisfactory assurance that I can give to the hon. Gentleman on that point.
The hon. Gentleman then raised the point of the wording of Article XIX(2). I say at once that there is force in the criticism Which he levels against the wording. By way of explanation all that I can say is that we have followed, as everyone agrees it is right to do, the O.E.C.D. model. When one gets a model agreement negotiated between many different countries and translated into different languages, all lawyers know that the result is that legal precision sometimes suffers in the translation. I think that that is probably what has happened here.
Quite clearly, the sense of the words is as the hon. Member has pointed out. If we were drafting this for our own purposes, I do not think that a British draftsman would have adopted those words.

Mr. Patrick Jenkin: The model is intended to determine the pattern of taxation, and I should have thought that it was doubtful practice that the actual words used in the model should be imported if, in the interpretation of English law, those words would not be clear and would be incapable of ordinary interpretation by the courts.

Mr. MacDermot: If we thought that there was any real risk of confusion and ambiguity, we would not follow the wording blindly. However, in general, we do stick to the wording of the model agreement. The general international agreement is that the various countries of O.E.C.D. should do so. In this case, no harm is done.
The hon. Gentleman asked me a question about machinery for the deduction of tax al the 15 per cent. rate rather than the standard rate. He is quite right in thinking that the particular scheme under discussion with the Stock Exchange

relates only to payments under the American Agreement, which concerns a very much greater number of payments. All that I can say is that no question has yet arisen of introducing such a scheme in the case of other countries and other Agreements, and it may be that it will not arise. It is only if there is a fairly substantial number of dividends passing to a particular country that the companies would favour the introduction of a scheme of this kind. The answer is that we should wait and see how it works out. I hope that with his explanation the House will think it right to pass the Order.

Question put and agreed to.

Resolved,

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (New Zealand) Order 1966 be made in the form of the draft laid before this House on 13th July.

To be presented by Privy Councillors or Members of Her Majesty's Household.

ASIAN DEVELOPMENT BANK (IMMUNITIES AND PRIVILEGES)

The Minister of State for Foreign Affairs (Mrs. Eirene White): I beg to move,
That an humble Address be presented to Her Majesty, praying that the Asian Development Bank (Immunities and Privileges) Order 1966 be made in the form of the draft laid before this House on 12th July.
The draft Order which was before the House follows from the Agreement signed by 22 countries on 4th December last in Manila for the establishment of the Asian Development Bank. A text of the Agreement was placed before Parliament by my right hon. Friend the Foreign Secretary in Command 2989 last May. This Bank is a project of the United Nations Economic Commission for Asia and the Far East and is complementary, or will be complementary, in its operations to the Colombo Plan.
The Order before us would bring the United Kingdom into compliance with chapter 8 of the Agreement. It must be made before the United Kingdom can proceed to ratification. The date for the coming into force of the Agreement has been set for 30th September, by which time, if it is to be effective, at least 15 countries, subject to certain conditions,


must have deposited their instruments of ratification or acceptance.
While this procedure is necessary, I should point out that the practical consequences of the Order are likely to be minimal. The United Kingdom, while being a full member of the Bank, would not be likely to have any offices or staff established or stationed here. The headquarters of the Bank is to be in Manila. Therefore, I repeat that the practical effect of this Order might be really nothing at all, although from time to time, no doubt, officials and other representatives of the Bank might find themselves in London.
Nevertheless, it is right that the House should examine the Order. It is similar to previous Orders made in respect of international organisations of which Her Majesty's Government are a member, although in some important respects its scope is more limited than most previous Orders. It follows the precedent of the two most recent Orders of this nature, those in respect of the European Space Research Organisation and the European Launcher Developer Organisation, each of which contain an exception from the immunity of the organisation and its officers in respect of civil proceedings relating to motor vehicle accidents and motor traffic offences.
A similar limitation has been incorporated into the present Order. This limitation, however, does not appear in the text of the Agreement establishing the Asian Development Bank, and it will, therefore, be necessary for Her Majesty's Government to add to their instrument of ratification a reservation on this matter. We shall also make reservations on one technical point concerning the deduction of tax at source in the United Kingdom and telecommunications. We cannot accept Article 54 of the Agreement.
Another exception to the immunity of the Bank is that proceedings arising out of the exercise of the Bank's powers to borrow money, guarantee obligations, or buy, sell or underwrite the sale of securities, are not covered. This means that when the Bank is raising loans or is engaging in any of the financial transactions which will form an important part of its functions, it will not be protected by immunity by suit but will be in the

position of any other entity. This limitation is necessary to ensure that the Bank is able to raise money on terms as favourable as any competing enterprise. Financial enterprises who fear that the Organisation may, in effect, default by shielding behind its immunity would not be prepared to lend money on such favourable terms.
While the immunities and privileges conferred on the organisation in general are as extensive as is customary in these Orders, the privileges and immunities accorded to individuals are much less extensive than is usual. For example, no special degree of privilege or immunity is accorded to high officers. In the majority of organisations the heard executive officer and his deputy are accorded privileges and immunities comparable with those of a diplomatic agent. But in the present Order all officers and staff, including governors and directors of the Bank, are entitled only to a minimum level of privileges in respect of their official acts and to exemption from Income Tax in respect of their official emoluments.
As an important financial contributor to the Bank and as a supporter of it during its creation and establishment, we have a particular concern to see that it is able to function successfully and smoothly. Care has been taken to ensure that the limited character of this Order accords with views on the subject which have previously been expressed in the House.
I hope that these efforts will be welcome and that the approval given by this House to the Order will enable Her Majesty's Government to ratify the Agreement before the closing date of 30th September and thereby participate effectively in the crucial stages of its initial development.
We have not been able to put a specific date in Article 11 of the draft Order because we cannot forecast the date at which the Agreement will be legally binding on the United Kingdom. This depends upon the deposit of the instrument and the ratification by other Governments as well as by the United Kingdom. However, we have indicated that the date will be notified in the London Gazette, as the hon. Member for Crosby (Mr. Graham Page) may be interested to learn. I gather that there are numerous precedents for this in Orders made in accordance with the Act of 1950.
I hope that with this explanation the House will approve the draft Order.

4.0 p.m.

Mr. Douglas Dodds-Parker: The House is grateful to the Minister, who put this Order forward with her usual charm, using a somewhat dog-eared brief which I first looked at 10 years ago when this problem came before us in its first beauty. I am sure that the House will accept the Order in principle. But it is right that it should look at these matters, because what is being done by the Government is important in many ways. It is very important that we should have international organisations making use of this country. It is not so much a benefit to us in the House but it is for the benefit of Whitehall and the City that the country should be used by permanent residents and temporary residents, and by individuals passing through.
The House and the public have always been rightly jealous of extending privileges and immunities, and from the explanation that the hon. Lady has given it would seem that these privileges and immunities are somewhat less than the Order would lead us to believe.
It is right to take up a few moments of the time of the House on one or two points which occurred to me in reading the Order. I have had the hon. Lady's answer to the first already. It was not clear to me why we should be asked to extend privileges and immunities, although we have not ratified the Agreement. I understand from her explanation that this is putting the cart before the horse, and that the two will meet up in due course and all will be well.
Secondly, is it really necessary for the bank and other such financial institutions to have even these minimal privileges? I have thought about this question quite a lot. Can the hon. Lady tell us what other financial institutions have such privileges and immunities? I assume that the World Bank does and also, probably, the officials of the International Monetary Fund, but do any other development banks of this sort have the rights which are before us at the moment?
Thirdly, how many permanent officials are likely to pass through the United Kingdom and enjoy these privileges?
I now turn to the Order. Article 3 (c) says:
In respect of a civil action by a third party for damages arising from an accident caused by a motor vehicle …
I am glad that this modification has been made to the 1950 Act, because this question, more than any other, has inflicted itself on public opinion. It is seldom the holder of the privilege himself who is the offender, but some lighthearted driver, and over the past few years I think that it has been generally accepted that this immunity should not be too widely given. Therefore, I agree that Article 3 (c) is correct.
Articles 4–8 are modifications of Articles 54–56 of the Agreement establishing the Bank. I think that the hon. Lady said that we objected to the whole of Article 54 of the Agreement. I assume that Article 54 does not cover any secret communications, such as the use of cyphers or code, but if everybody is allowed the same treatment within the area of the Bank I am not sure why we should object to it.
The next point arises on Article 9 (b),
unless he is a citizen of the United Kingdom and Colonies, exemption from income tax in respect of emoluments received by him as an officer of the Organisation
Does a citizen of the United Kingdom pay United Kingdom taxes even it serving the organisation in the Manila headquarters? I have always thought that this would be a pity, because it might discourage some countryman of ours from taking up work in the organisation. Does he, on the other hand, pay Philippine rates of tax, which, I am sure, must be less discouraging than the taxes he would have to pay at United Kingdom rates?
My next point is, perhaps, the most important. In the opening words of Article 9, the persons referred to are, among others,
Director, alternate, officer … and any expert….
This is very wide. As Lady Tweedsmuir, then my hon Friend the Member for Aberdeen, South—alas, missing from this bench now—said in the debate on 29th July, 1965, when this point was referred to, the objection which the Select Committee found to Article 12 of the Order then under discussion was that it included a category of staff undefined.
It seems to me that this term "expert", without definition, is too wide. Whether one could use some such words as, "an individual appointed for a specific task for a limited time", I do not know, but I do not like the blanket word "expert". In any case, "expert" is a designation which I am always very frightened of in any form of activity in this world, and, as I have said, the Select Committee on Statutory Instruments has objected to it in the past, I am sure that others would be pretty quick to rumble a local Balogh or Kaldor—rather quicker than we have been in the past in this country.
This is a somewhat wide term to be used here, and to some extent it vitiates the narrowness which I have understood to be the intent of the Order now put before the House.
If the Minister can give us assurances on these points, I am sure that I can persuade my hon. Friends not to press the matter to a Division.

4.8 p.m.

Mr. Eric Lubbock: I hope that I shall be forgiven for taking a little time to raise certain additional points on the Order. I agree with the hon. Member for Cheltenham (Mr. Dodds-Parker) that it should not be allowed to go through without discussion. We are conferring on a commercial organisation the privileges and immunities which apply to diplomats resident in this country. Article 4 makes clear that these privileges and immunities are precisely the same as those applying to the envoy of a foreign Power. In these circumstances, we ought to scrutinise the terms of the Order carefully.
This is the more necessary, I suggest, because one notes from the Order Paper that the Order has not yet been considered by the Select Committee on Statutory Instruments. I notice these words appearing fairly frequently on the Order Paper nowadays, and I wonder whether an Order of this kind conferring extensive privileges and immunities ought to have been brought before the House before having been considered by the Select Committee. Perhaps the hon. Lady will give us a reply on that point.

Mr. Graham Page: It is unfortunate that this phrase has to be used on the Order Paper. In fact, the Order has been considered by the Statutory

Instruments Committee and has been held up on a point on which I hope to catch the eye of the Chair this afternoon.

Mr. Lubbock: The hon. Gentleman reinforces my point. If the Select Committee has observed something in the Order which it thinks should be drawn to the attention of the House, one is all the more entitled to criticise the Government for bringing forward the Order at this stage. In the light of what the hon. Gentleman has just said, perhaps we ought to reconsider whether the Order should be passed this afternoon.
I agree with the hon. Member for Cheltenham in welcoming Article 3(c) under which exemption from proceedings is not to apply to motor vehicle offences. I wonder whether this limitation is entirely necessary. As he said, we are here considering a commercial organisation, and I cannot see the a priori justification for according to a commercial organisation such extensive privileges as ordinarily apply to the embassies of foreign countries.
If one looks at Command Paper 2989 which the hon. Lady mentioned, one finds in Article 48 of the Agreement these words:
To enable the Bank effectively to fulfil its purpose and carry out the functions entrusted to it, the status, immunities, exemptions and privileges set forth in this Chapter shall be accorded to the Bank in the territory of each member.
There is no justification for that. It then goes on to outline what those privileges and immunities should be. It does not say why it is necessary to the commercial functioning of the Bank that the privileges and immunities should be conferred upon it. Having read them, I cannot see they have anything to do with the commercial operations of the Bank.
Also, I note that even Her Majesty's Government have not accepted Article 54, "Privilege for Communications". I agree with the hon. Gentleman that it seems odd that this particular one should be singled out, because it seems one of the most innocuous.
Then there is Article 50, which says:
The Bank shall enjoy immunity from every form of legal process, except in cases arising out of or in connection with the exercise of its powers to borrow money, to guarantee obligations, or to buy and sell or underwrite the sale of securities …


Does this mean that the Bank has immunity from legal proceedings in respect of its employees? I know that the hon. Lady said that not many employees or servants of the bank would be likely to be resident in this country, but this is surely a matter rather like that of the housemaid's illegitimate baby —it could be overlooked because it was a small one.
Does Article 50 really mean that an employee of the Bank who is resident in this country is not entitled to take proceedings, for example, in respect of the Contracts of Employment Act? I mention that as only one example which has occurred to me, among a number which might possibly arise.
To come to the Order itself for a moment, I see that the Organisation will have
the like inviolability of official archives as is accorded in respect of the official archives of an envoy of a foreign sovereign Power accredited to Her Majesty.
Again, I really cannot see that it is necessary for the Bank to have this particular privilege in order to carry out its commercial operations.
By Article 6
The Organisation shall have exemption from taxes on the importation of goods directly imported by the Organisation for its official use …
I am almost positive that the hon. Lady will say to the House that she cannot see any circumstances in which that article will be brought into operation because the Bank does not import goods; it is not likely to be bringing in large quantities of duty-free cigarettes or liquor.
I see the hon. Lady shaking her head. So why have this article in at all? It strikes me that we have just put in everything anybody could think of and said, "These are the privileges we will confer". I should like to have a much fuller explanation from the hon. Lady than that which we have had so far.
Then we come to Article 9(b). I agree with what the hon. Member far Cheltenham has said. We have this exemption in respect of emoluments received from Income Tax for a servant of the Bank. Why should a person resident in this country, even if he is a citizen of a foreign Power, be entitled to complete exemption from our Income Tax? Bearing in mind the present economic situation

of the country, I should have thought it wholly wrong to exempt altogether from Income Tax any person working in this country.
My view in general of this is that there has been a proliferation of international bodies of one kind or another, on which extensive privileges and immunities have been conferred, and I really do not think the House should permit this situation to be extended. We really want not only a statement that we have signed a treaty, the terms of which are embodied in the order, but art a priori justification for conferring such extensive privileges on anybody.

4.15 p.m.

Mr. Graham Page: As I said in an interjection while the hon. Member for Orpington (Mr. Lubbock) was speaking, the statement on the Order Paper that
The Instrument has not yet been considered by the Select Committee on Statutory Instruments
is normal but not correct. The Instrument has been considered by the Committee and it has asked for an explanation by the Department of Article 11, which deals with the coming into force of the Order. It states that the Order
… shall come into operation on the date on which the Agreement establishing the Asian Development Bank, signed at Manila on 4th December, 1965, enters into force with respect to the United Kingdom.
There is no explanation of what is meant by
… enters into force with respect to the United Kingdom.
It seems quite impossible for the ordinary layman reading the Order or having to apply it afterwards or even for judges in the courts having to apply it, to know what is meant by that phrase and when exactly the Agreement does come into force with respect to this country.
It is true that the Article goes on to say:
This date shall be notified in the London Gazette."
That, however, is not conclusive evidence of when the Order comes into force. If it were to be conclusive evidence, we should on this occasion be delegating to a civil servant the power delegated to Her Majesty in Council in this case—that is to say, the civil servant cannot decide for himself and advertise in the London Gazette the date on which he thinks the


Agreement enters into force with respect to the United Kingdom.
This is not a mere academic point. By this Order we are taking away the rights of a subject to take action in the courts. It is true that motor accidents are not immune but a motor accident is not the only tort which can occur. There may be many cases of neglect, for example, by a person with immunity under the diplomatic privilege rules and it may be very important to know the date on which that immunity arises. If a certain act of negligence or default has occurred, it may be very important, in the action by the person who has suffered the injury or the damage, to know when the immunity arose, but it may be difficult in this case because of the vague words in Article 11—
… enters into force with respect to the United Kingdom.
An Order should not be put before the House in this vague way when it is affecting the rights of ordinary citizens. This is not, as I say, an academic point. It may well arise in the case of injuries suffered and in the case of an action brought by an ordinary citizen against an employee of this Bank. In approving the draft Order, we should be more certain as to what is meant by these words, "enters into force", what has to happen in order to bring the Agreement into force and, therefore to bring the Order into operation. and this should be stated clearly in the Order itself.

4.19 p.m.

Mrs. White: I will first deal with the last point made by the hon. Member for Crosby (Mr. Graham Page). He is making extraordinarily heavy weather about it. It is clear from what I said that one cannot at this point put a precise date into the draft Order because we do not know the dates on which other countries will deposit their instruments of ratification and until they and we do so, we are not bound by the Agreement. I am sure that it would be contrary to the wishes of the House to put some date extending these privileges, about which some criticism has been made, which might be prior to the date under which we would be under an obligation to do so.
I fail to see the force of the argument advanced by the hon. Member for Crosby. The point that he made in a discussion on an earlier Order has been met in this Order, because we have said quite clearly to the public that the date on which the Order comes into operation will be published in the London Gazette. This is common form for matters of this sort, and I am disappointed that the hon. Member for Crosby, who is usually so clear headed, should have allowed himself to become enmeshed in what is a completely bogus argument.

Mr. Graham Page: I was complaining of the words, "enters into force". The hon. Lady is endeavouring to define them as laying some papers or others. If they were defined in some form such as that in the Order, I would have no complaint, but I am saying that it will not be possible to identify the date when it enters into force.

Mrs. White: The date on which it enters into force will be the date when it becomes applicable to the United Kingdom. We cannot foretell what the date will be. In the Explanatory Note it says that it will come into operation
on the date on which the Agreement.. enters into force with respect of the United Kingdom",
and I do not see how we can put it more clearly. It is nonsense to suggest that this is an arbitrary act, that it is some date chosen at random by a civil servant, when it is a point in time which can well be established. It seems to me that the hon. Gentleman's argument is an unworthy one.
There are other matters connected with the Order which I think merit some further explanation, which I shall do my best to give.
The hon. Member for Cheltenham (Mr. Dodds-Parker) inquired how many international financial organisations other than the one which we are discussing have comparable immunities and privileges. The other ones concerned have wider immunities and privileges than the ones being proposed here. The organisations are the International Bank for Development and Reconstruction, the International Monetary Fund, and the International Finance Corporation. The International Development Association


is not quite comparable, but we might put that in as well. They are covered mostly by special legislation which confers wider privileges than the relatively narrow ones proposed in this Order.
The hon. Member for Orpington (Mr. Lubbock) said that this was a commercial organisation. It is not in the ordinary sense of the term. It is an inter-Governmental organisation. The members are not private persons, they are Governments and they are States. That being so, it is the opinion of the Government, as it was of our predecessors, that organisations of this standing have certain differences from ordinary commercial organistions, of which the members would be private persons, or private bodies, and therefore they enter into the realm of diplomatic behaviour, and some recognition of this is desirable.

Mr. Lubbock: I was looking at the power of the Bank to borrow money to guarantee obligations, to buy and sell, to underwrite the sale of securities, and so on. It is those activities of the Bank which say are commercial in their nature.

Mrs. White: But those activities arc the ones which do not attract privileges under this Order, as I had hoped I had explained when I spoke earlier.
I turn now to the question of our difficulty over Article 54 which is referred to in paragraph 8 of the draft Order, which is concerned with communications. The point here is that in our view the proposal under Article 54 of the Agreement goes wider than we consider is justified for an organisation of this kind because in the International Telecommunication Convention signed in Geneva in 1959 which lays down the persons and authorities entitled to these special privileges, no international organisations other than those of the United Nations are included, and this Bank, although it is linked at one or two removes with the United Nations, is not a United Nations organisation in that sense.
Therefore, we felt it would not be desirable to extend the special privileges it was trying to claim under the Agreement. In this respect, as in several others, we are narrowing for the United Kingdom, the privileges which it is proposed to extend. I am sure that the hon. Member for Orpington will appre-

ciate that the countries in which the Bank will be carrying out its operations will not be confined to the United Kingdom and that it may be very desirable to have certain safeguards. One should judge the matter partly on that basis.
The hon. Member for Cheltenham asked about Income Tax as it affected a United Kingdom subject. My advice on this—and I confess that I am no expert in the law of Income Tax—is that it would depend on the particular circumstances of the case, and that in some circumstances an officer with United Kingdom citizenship might be liable to United Kingdom tax on part of his emoluments even though he was serving in Manila or elsewhere outside the United Kingdom—but that this is not very likely. I am afraid that that is as far as I can go in elucidating that point.
On the question of experts, referred to in Article 9, I have great sympathy with hon. Members over the difficulty that has arisen in this matter. All I can say is that it is necessary to include them in order to bring ourselves in line with Article 55 of the Agreement, which refers to:
All Governors, Directors, alternate, officers and employees of the Bank, including experts performing missions for the Bank".
That is the reason for using that term. I admit that it could be regarded as a fairly wide one but, as I have said, it is to bring us into line with an Article the general purposes of which we agree with.
I do not wish to detain the House by going into any wider issues, except to refer to one other objection made by the hon. Member for Orpington, who spoke about the proliferation of bodies. If we concern ourselves primarily with those which come under the 1950 Act, which is the basis for these various Orders, we find that there are 29 international bodies, with two pending and the one that we are now discussing.
On the other hand, in the period in question 13 have lapsed, and although one cannot give any estimate of what number of persons may be involved under this Order—the organisation has not been set up, so I cannot give a proper estimate of how many employees might be concerned—I am advised that at present, in the United Kingdom, there are 284 persons who would come under these


sorts of arrangements—some of those arrangements being rather wider than this but some of them being as narrow as this.
This compares with nearly 5,000 in the United States, well over 3,000 in France, and about 200 in even so small a country as Austria, so that we are not more burdened than other countries, or unduly generous in this matter.
I hope that, having given as full an explanation as I can in reply to the points that have been raised, the House will be willing to approve the Order.

Question put and agreed to.

Resolved,

That an humble Address be presented to Her Majesty, praying that the Asian Development Bank (Immunities and Privileges) Order 1966 be made in the form of the draft laid before this House on 12th July.

To be presented by Privy Councillors or Members of Her Majesty's Household.

PETROL STATIONS (SELF-SERVICE)

Motion made, and Question proposed, That this House do now adjourn[Mr. Howie.]

4.29 p.m.

Mr. R. Gresham Cooke: It has often been remarked as a matter of surprise in motoring circles and motor trade circles that British motorists do not seem to take kindly to having the windscreens of their cars wiped or their oil and water checked. Unlike the position in America, it is said that British motorists do not seem to have the time, that they rush off as soon as they have collected their change and the attendant has no time to wipe the windscreen or do anything, else.
Last autumn, I motored about 2,000 miles in America and in each service station I regularly had my windscreen wiped and my oil and water checked. I suddenly discovered the reason for this difference in practice between Britain and America. The difference lay in a simple device known as the latched automatic cut-off pump nozzle. This nozzle allows two things to a petrol pump. First, it automatically cuts off when the petrol tank of the motor car is filled or when the petrol has reached the tip of the

nozzle. This is done by a little spring-loaded device which is part of it. That part of the device is now in use in some petrol stations in this country to prevent overfilling of the petrol tank.
Secondly, in this latched nozzle device in America, there is a latch on the handle of the nozzle which allows the nozzle of the pump to be latched and unattended while the tank is being filled. This is what is wanted over here. The attendant would not then have to stand, as he does here, whistling through his teeth and cursing the Government for having put up the price of petrol. He could leave the pump and either wipe the windscreen and check the oil and water or, if in a hurry, collect one's change. The attendant would be free to stick the nozzle into the tank and then do the same for other motor cars.
Therefore, one attendant at a petrol station could attend to two or three cars at once and push the nozzle in and collect his money from each car.
I was so struck by the importance of this little device for our overcrowded and busy island that on my return I wrote an article for the technical trade Press, advocating its immediate use in this country. I claimed that it would be a convenience for motorists, would save manpower and would increase productivity in garages. I also advocated that banks of petrol pumps should be put at right angles to the road and not parallel to it, so as to allow three or four cars to go through the gates at once, instead of having to wait for the car in front, as is so often the case in this country.
Also, sales of petrol would be helped if it was sold in units of £1 or 10s. to save time and the issue of change. Soon after this little article was published, I was told that the latched nozzle was not allowed by local authorities in this country—they, after all, are the controlling licensing authorities—because they followed a document called "The Model Code of Principles of Construction and Licensing Conditions for Petrol Filling Stations", issued by the Home Office.
That code did not mention the use of the automatic latched cut-off nozzle. I was told that representations had been made by the petrol companies to the Home Office for changing the model code to allow the latched nozzle. However,


to keep the matter alive and register my interest in it, I asked some Questions about it and I think that it is illuminating to consider the answers.
On 27th January, I asked:
… what progress is being made in revising the Model Conditions for petroleum spirit licences so as to allow automatic cut-off pump nozzles …
The Under-Secretary of State for the Home Department, the hon. Member for Cardiff, West (Mr. George Thomas), answered:
A revised version of the Model Code of Principles of Construction and Licensing Conditions far Petrol Filling Stations, which takes account of these devices, will shortly be submitted to the Standing Advisory Committee on Dangerous Substances for its consideration. The revised Code if approved, will then be circulated for the general guidance of the licensing authorities as soon as possible."— [OFFICIAL REPORT, 27th January, 1966; Vol. 723, c. 106–7.]
That was 27th January. I allowed the hon. Gentleman two months. On 7th March I asked another Question about what progress was being made by the Committee reviewing the recommendations made to the local authorities. On this occasion the hon. Gentleman told me,
these will he submitted to the Standing Advisory Committee on Dangerous Substances for its consideration as soon as possible."—[OFFICIAL REPORT, 7th March, 1966; Vol. 725. c. 1721.]
That was before the General Election. Ministers were very enthusiastic and forward-looking at that time. However, after the General Election I asked another Question, on 19th May. I asked when the Standing Advisory Committee on Dangerous Substances would report to the Minister on the model code. The right hon. Lady the Minister of State, not so enthusiastic after the General Election, replied:
The use of these devices is only one of many matters covered in the new draft code, and at this stage I cannot say how soon the Committee will be able to make recommendations about them."—[OFFICIAL REPORT, 19th May, 1966; Vol. 728, c. 290.]
I gave the Home Office another two months. On 27th July I asked the Secretary of State what progress was being made and when he expected the Committee to report. I was answered by the right hon. Lady, who said:
The Standing Advisory Committee on Dangerous Substances has considered the draft of the revised Model Code of Principles of Con-

struction and Licensing Conditions for Petroleum Storage, which includes a reference to these nozzles; and has arranged for a technical sub-committee to examine it in detail. The sub-committee, on which are representatives of government departments, the local authorities and the oil industry, will no doubt make such inquiries as it considers necessary. It is too early to say when the subcommittee will be able to report, but I recognise the need for speed in this matter."—[OFFICIAL REPORT, 27th July, 1966; Vol. 732, c. 291–2.]
I was one of the millions of people who listened during the General Elections of October, 1964, and March, 1966, to the promises made by the Prime Minister about swiftly ushering in a new dynamic, technological age. I was so enthralled and enthused by all this that I almost voted Socialist at those elections, But I am afraid that in this case the dynamic technological age has become bogged down in the technical sub-committee. I would not have had to keep the right hon. Lady here late on Friday afternoon, when I know that she wants to go to Yorkshire, if her Department had acted with the speed the Prime Minister promised us in October, 1964.
Now the Selective Employment Tax has made the matter all the more urgent. A garage recoups itself for the payment of its staff and its overheads by selling new cars and used cars and by means of repair charges and petrol sales. New car sales will drop through the restrictions on hire purchase, the price of petrol will be controlled, and repair charges are virtually controlled. So the only way a garage can find the money to pay the Selective Employment Tax is by trying to reduce staff. That is the shake-out that the Government want. A garage having perhaps six or eight pumps in two banks and two forecourt attendants to attend them will now have to try to obtain increasing productivity and the other things that the Government want. It may now want to have only one forecourt attendant instead of the two. The adoption of the automatic latched nozzle is the way to do, this. In happier times if we have these nozzles we can return again to having two attendants and thus have our windscreens wiped as well.
Why is there delay in revising the model code? Is it the usual over-cautious British attitude? It reminds me of the L.C.C. before the war when it was drawing up the regulations for its great concrete building, the Earls Court Exhibition


Hall, and it required 137 fire exits to be put in the building when everybody knew that the building could never burn down.
Three things are said against the use of a latched nozzle in this sense. First of all, it is said that there is danger of the nozzle falling out of the tank and spilling petrol. There is inside it an impact device which trips the mechanism and stops the flow of petrol. It is then said that motorists might drive away with the nozzle of the pump still in the petrol tank of the car. However, here is a shearing device, a soft section, which shears off and cuts off the supply of petrol if that should happen. Then it is said that the speed at which the automatic pump fills a car's tank might result in blow-back and the spilling of petrol. Here again there is a device so that the speed of petrol flow can be set by the attendant before the nozzle is inserted in the car.
The British design for these latched nozzles has all these safety features. There is a German pump nozzle which has similar safety features and which is made under licence in this country. I understand that the Greater London Council is having tests conducted in America by an organisation called the Underwriters' Laboratory. That is good for the Council, but why this elaborate caution? Why cannot we revise the model code?
The Minister should bear in mind that these nozzles have been adopted in 20 countries, including America, Australia, Germany, Denmark, Norway, Sweden and Greece. Surely the inquiries of the technical committee must now be complete enough to show that these nozzles should be introduced in this country. It is extraordinary to think that these latched nozzles have, in fact, been used in Britain for many years. Despite the local authorities and the Home Office, they have been used at American bases and Air Force stations and, because they are outside the jurisdiction of local authorities, they cannot stop them being used.
The model code must be amended and recommendations made to local authorities to follow the amended code. This should lead to more self service stations operated by coin or bank notes, as is done in Sweden and Germany. Local authorities which are nervous about such service stations may attach such condi-

tions as they wish. A few local authorities require attendants to hover over the motorist while the motorist does the work. That is not only uneconomic but silly, because paraffin is already sold by self-service coin operated pumps at garages. That being so, why not petrol?
One company at Ewell in Surrey has persuaded the local authority to allow such a self-service station to be started. As a result, petrol at that garage is "3d. off" and there are eight pumps serving eight cars simultaneously. One attendant is available to top up oil and attend to other necessities. Nevertheless, the handle of the nozzle must be held when the petrol is being supplied.
At another petrol station, on the Exeter-Plymouth road, petrol is sold by the half crown or £ note placed into an electronic device. The motorist presses an amber light and a green light comes on to tell him when to start taking petrol. One advantage of the self-service is that one does not have to tip attendants. A self-service station at Bognor has been allowed to operate on condition that the attendant lives on the premises and keeps an eye on the pumps.
In these days when we are seeking higher productivity and speed and efficiency in transport, we should go further and allow self-service petrol stations to come into being. This is particularly important at night time, remembering, too, that petrol can be sold more cheaply, certainly at "3d. off".
However, the key to all this lies in the use of the latched nozzle. The Government should say today—I hope the Minister will say this—that, as a matter of urgency, on the ground of productivity and greater efficiency, in addition to the convenience of motorists, they will issue a revised model code at once to local authorities authorising the use of the latched nozzle. I hope that they will also, in the interests of productivity, urge the use of self-service stations and, in any event, encourage people to buy petrol by the £ or 10s. note instead of going to the trouble of requiring change.
By taking these three steps the Government will go a long way to achieving speed of service, efficiency, greater productivity and the convenience of the motorist. Is it not very tempting to the Government to kill four birds with


one stone? I believe that the latched nozzle will be the greatest step forward for petrol stations since the introduction of the electric pump, and I hope that the right hon. Lady will tell us that she is in favour of it and will allow this great step forward in efficiency and productivity.

4.45 p.m.

The Minister of State, Home Office (Miss Mice Bacon): I know that the hon. Member for Twickenham (Mr. Gresham Cooke) has campaigned for some little time for the introduction of automatic petrol filling devices, and before raising the matter today he has asked many Questions on the subject. His interest in the motor trade is well known, and although I cannot hope to rival him in his knowledge of that trade I can assure him that I am broadly in sympathy with his aims. In particular, I am no less an enthusiast than he for the introduction of any change that might help to achieve more productivity.
I should, first, remind the House of the law relating to the storage of petroleum spirit. The basic law on the subject is contained in the Petroleum (Consolidation) Act, 1928. In simple terms, the Act says that petroleum spirit shall not be kept in any premises that do not have a petroleum spirit licence and, as the hon. Gentleman knows, petroleum spirit licences are issued by the local authorities, who are empowered to impose any conditions they think necessary.
In granting or withholding licences, local authorities are guided to a large extent, although it is not obligatory, by a model code issued by the Home Office in 1957. This code sets out the principles of construction, and licensing conditions for various premises, including petrol filling stations. It also deals in some detail with such matters as the construction of buildings and storage tanks, safety precautions and devices—including fire-fighting equipment—and requirements for petrol pumps.
The hon. Gentleman will realise from this that the code—and even the new code that we envisage—does not deal solely with petrol pumps but with a variety of other things, including the safety of the premises. But the code only provides general guidance; it is for the local authorities to take the final deci-

sion in the particular circumstances of each case.
The Home Secretary is the Minister who considers appeals from persons who have been refused a petroleum spirit licence by a local authority or who consider that the conditions imposed in the grant of a licence are unfair. On appeal, the Home Secretary may grant a licence, with or without conditions, or he may modify the conditions attached by the local authority. I want to emphasise that the sole purpose of the licensing procedure is to ensure the safety of the public. We are not dealing with water, but with petrol, and although petrol is a common substance, it is dangerous. I do not think that anybody would dispute the need for safeguards for its storage and use.
I should like to deal, first, with the problem of the automatic latched petrol nozzle operated by petrol pump attendants and, secondly, with the wider question raised by the hon. Gentleman of self-service petrol stations. As he has said, the petrol pump attendant puts the automatic latched nozzle into the filling pipe of the vehicle, and then lifts the latch to allow the petrol to flow. At the same time, the latch, when lifted, is held in position by a stop, so that the attendant can leave the nozzle in the filling pipe of the vehicle and walk way.
The attendant can either attend to another customer or, as the hon. Member said, he can do some other service for the customer he is attending, such as wiping the windscreen. When the petrol tank is full, a sensing device at once releases the latch so that the flow of petrol is automatically cut off. All the attendant then needs to do when he returns is to remove the nozzle and collect payment against the amount metered on the pump.
As the hon. Member said, nozzles of this kind are in use in the United States and some European countries, but so far as I know they have not yet been licensed by any local authority for use in this country in the sense that a licensing authority has approved the absence of the attendant while the filling operation is going on. The present model code specifically recommends that no stop or catch should be provided on the nozzle attached to the delivery hose from a petrol pump which would enable the valve to be kept


fully open and so eliminate manual control.
I admit that it is because of this recommendation that local authorities generally have felt unable to licence installations using automatic devices. The present position is that my Department has been consulted both by the oil industry and by local authorities about this problem. We have made it clear that while we are in no way opposed in principle to these devices we are concerned that if they are used they should be used with essential precautions.
For example, we think that the local authorities would want to be assured that any apparatus had in-built safeguards which would prevent a dangerous spillage of petrol should the nozzle accidentally fall or be knocked out of the filling pipe of a vehicle. It should also be proof against danger from a motorist driving off while the nozzle was still in the filling pipe of the car. We also think that the cut off device should be capable of operating at defined flow speeds.
This problem first came to our notice at a time when we had already decided that the model code, issued in 1957, was in need of review. These devices are, in fact, mentioned in the revised draft of the model code which has now been prepared. The revised draft code was recently submitted to the Standing Advisory Committee on Dangerous Substances. It decided that detailed study of the draft should be referred to a special subcommittee on which central Government Departments, the local authorities and the oil industry are all represented.
The hon. Member has put many Questions on this subject. We are at one with him in wanting a satisfactory conclusion as soon as possible. We therefore drew the attention of the Advisory Committee to the need for speedy action on the particular issue of automatic cutoff nozzles, but the Advisory Committee decided that this point could not conveniently be considered in isolation from the rest of the code. It felt that the whole code regarding premises, and so on, would have to be considered in conjunction with the latch nozzle. This was entirely a matter for the Committee itself to decide.
Self-service filling has also been mentioned by the hon. Member. This can be

divided into two main kinds, installations where members of the public serve themselves under supervision and unattended self-service stations. As to the first, our provisional view is that before licensing such an installation local authorities should satisfy themselves, that, whether the money is paid in at a kiosk or fed into a coin box at the pump itself, it should not be possible for a customer to dispense petrol before the nozzle of the delivery hose is actually in the filling pipe of his vehicle. There should also be a safeguard to prevent over-filling.
A combined warning and remote control device may also be needed so that the attendant can prevent a pump starting up before a customer is ready to begin filling and so that he can switch off at the pump in an emergency. The arrangements must obviously be made to deal with accidental spillage. Even more safeguards will be needed for unattended self-service stations. It would seem essential to provide as far as possible against accidental or deliberate misuse.
Incidentally, I know of one such installation in Britain where the proprietor has now closed down the self-service pump in question. He lives on the premises and was constantly being disturbed by the noise of car engines during the night, and by motorists knocking him up to demand change.
The problem of self-service stations is also touched upon in the draft of the revised model code to which I have referred. I think that it is right to await the sub-committee's deliberations. I fully sympathise with the hon. Member's desire to see that the possibility of modern petrol station equipment is fully exploited, both in the interests of making the best possible use of the country's manpower as well as of improving the service to motorists.
But before we make final decisions we must be satisfied—and I think that the House would agree that we ought to be satisfied—on the basis of the expert advice which will be given to us, that we can confidently recommend any proposed changes in present practice to the local authorities without increasing the risk either to the staff or to the public.
The sub-committee will be at work on these problems very soon and I will see


that its attention is drawn to what the hon. Member has said. I feel confident that it will do its best to report conclusively on the matters in which the hon. Gentleman has a special interest as well

as deal with the revised model code as soon as possible.

Question put and agreed to.

Adjourned accordingly at three minutes to Five o'clock.